S.80G:Donation-Deductions can be claimed for donation as well as exemption under section

 

The assessee made a donation of a certain amount, which was debited to its 'K' Unit. In the

computation of income, entire donations paid were added back to income of 'K' unit and exemption

under section 10A was claimed on the entire income of 'K' unit. The AO opined that once donations

debited in the Profit and Loss Account were added back to the Net Profit of the 'K' Unit, it became the

income of 'K' Unit on which exemption under section 10A had been allowed. Hence, claiming

deduction under section 80G in respect of donation amount would amount to claiming double

deduction for a single outgo. The Tribunal, however held that section 10A was an exemption section

whereas section 80G was a deduction section and therefore there would be no double deduction of the

same item, even if a benefit under both the sections had been claimed. Therefore, the Tribunal held

that donation amount qualified for deduction under section 80G. On appeal to the HC, the Court

concurred with Tribunal’s view. It observed that as the entire income from the 'K' unit was exempted

from tax, debiting the donation in the first instance and adding it back subsequently made no

difference. The entire income was exempted. Therefore the deduction under section 80G is claimed

from the total income excluding the income of 'K' unit and in law, the assessee is entitled to the said

benefit.

CIT .v. Infosys Technologies Ltd. (2014) 223 Taxman 469 / 360 ITR 714 / 270 CTR 523

(Karn.)(HC)