Section 35(1)

Section 35(1) — the law in short

What the courts have decided on section 35(1), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• PCIT-4, Kolkata v M/s Maco Corporation India Pvt Ltd High CourtHelps taxpayerValidity unconfirmed
  Is there any High Court authority that a donor keeps his s.35(1)(ii) weighted deduction when the donee's approval is cancelled with retrospective effect after the payment?
  Yes. The Calcutta High Court dismissed the Revenue's appeal and answered the questions on s.35(1)(ii) against it, holding that under the Explanation in s.35(1) a deduction shall not be denied merely because the approval granted to the research organisation has been withdrawn after the payment, and applying the Supreme Court's decision in CIT v Chotatingrai Tea. The Tribunal's finding that nothing on record showed the assessee had connived in the arrangement was held not to be perverse.
• Ashokkumar Gokulchand Sananda v ACIT, Akola Circle ITATHelps taxpayerValidity unconfirmed
  The CBDT cancelled my donee's s.35(1)(ii) approval with retrospective effect two years after I donated, and the reassessment has taken away my 175 per cent weighted deduction and added a notional commission. Does the deduction survive?
  Yes, on these facts. The Explanation in s.35(1) says in terms that the deduction shall not be denied merely because the approval granted to the institution has been withdrawn after the payment, so a retrospective cancellation is by itself no ground for disallowance. A general Investigation Wing report about the donee, never furnished to the donor and never linked to his particular transaction, will not carry the disallowance either, and the consequential s.69C commission addition falls with it.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.