COMMISSIONER OF GIFT TAX Vs. WESTERN INDIA INDUSTRIES

JUDGEMENT

(1.) THE Court has disallowed the exemption on the ground of lack of bona fide and has distinguished the Bombay decision in Jayantilal's case. However, the Court does not seem to be justified in observing that the Circular of 1960 cannot assist the assessee. No doubt the circular was issued in the context of the Bombay decision which was concerned with the Companies Act, but the circular clearly extends the benefit of exemption under S. 5(1)(xiv) of the GT Act in respect of donation to political parties. The only thing required is that the donation should have been made under the authority of a specified clause in the memorandum and Articles of Association of the company. The whole circular is reproduced below :

(2.) THE assessee filed his return of gift in respect of the asst. year 1967 68 on 15th May, 1973, declaring therein "nil" gift. However, in Annexure 'D' of Part II of the return of gift it was mentioned that a donation of Rs. 55,000 was made by the assessee to the Gujarat Pradesh Congress Committee, Ahmedabad, for its election fund, which, according to the assessee, was exempt under s. 5(1)(xiv) of the said Act.

(3.) SEC . 5(1)(xiv) of the said Act which falls for our consideration reads as under: