Government Salary Grant excluded from accumulation base where funds were earmarked for salaries and not under assessee's dominion.

Government Salary Grant received under a scheme earmarked for salary payment was not income available for application or accumulation under section 11(1)(a) because the assessee had no dominion or beneficial ownership over the funds and acted only as a conduit for disbursement. A receipt burdened with a specific and binding utilisation obligation does not acquire the character of income capable of discretionary application or accumulation. The grant was therefore excluded from the base for computing accumulation.

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Issues: Whether the Government Salary Grant received by the assessee could be treated as income available for accumulation under section 11(1)(a) of the Income-tax Act, 1961.

Analysis: The scheme of section 11(1)(a) contemplates income derived from property held under trust and available at the disposal of the assessee for application or accumulation for charitable purposes. A receipt impressed with a specific and binding utilisation obligation does not acquire the character of income capable of discretionary application or accumulation. The Government Salary Grant was received under a scheme earmarked for payment of salaries, with no dominion or beneficial ownership in the assessee, and the assessee merely acted as a conduit for disbursement.

Conclusion: The Government Salary Grant could not be included in the base for computing accumulation under section 11(1)(a), and the exclusion of the grant was upheld.

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