TaxTMI 
TaxTMI 
TaxTMI 
2013 (6) TMI 682
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.... 2. ARAI, Pune 21,80,00,000 3. VRDE 31,75,00,000 Total 59,63,00,000 4. The Assessing Officer noticed that the assessee had given advance for purchase of land and upgradation of existing facilities aggregating to Rs. 59.63 crores. He required the assessee to explain as to how these investments were as per requirements of section 11(5) of the Income-tax Act, 1961. After examining the assessee's reply, the Assessing Officer observed that the same had no force because the assessee simply stated that the advance was given out of the Government of India grant which was meant for utilisation according to terms and conditions of the release of Government funds. The Assessing Officer also examined the details of other advances aggregating to Rs. 1,36,31,418 and observed that advance given was not according to section 11(5) and, therefore, violated the provision of section 13(1)(d). Further, he observed that the assessee purchased the land at Silchar at Rs. 11,25,297 but the land was purchased in the name of Department of Heavy Industries. This was also not in accordance with section 11(5) of the Act. The Assessing Officer, after examining the income and expendit....
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....ciples laid down in the General Financial Rules and the conditions detailed out in the annexure. 5.1. The learned Commissioner of Income-tax (Appeals) further noted as under : The minutes of cabinet committee meeting dated July, 25, 2005 (confidential) comprises the following clause, which clearly establish that the appellant-society is working at the instance of Government of India as "trustee". Clause 7.2 (page 77 written submission dated September 15, 2009) is reproduced below : "Department of Heavy Industry proposes to endow full implementation responsibility on NATIS and would enable it comprehensively for taking required decisions on project implementation. The PIB, being the Governing Council of NATIS, will accordingly be empowered to take all necessary decisions concerning the implementation of NATRIP except that it will require prior permission of the Government in the Department of Heavy Industry for following : (i) Change in location of centers. (ii) Nomination of additional members on the PIB representing the interests of the Government. (iii) Replacement of global co....
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.... by the Government of India within a specified time. The assessee's contention is that grant can neither be construed as corpus nor income of the society. The second issue is regarding interest received on fixed deposits receipts where the contention of the assessee is that interest received on fixed deposits, if remained unutilised, had to be returned to the Government. Thus, the contention is that there is overriding title over the interest on fixed deposits receipts. 9. Section 11 exempts income from property held for charitable or religious purposes. Clause (a) of section 11(1) exempts income to the extent the income is applied for charitable or religious purposes. In case the application of income is less than 85 per cent. of the income derived during the year from property held under trust then as per section 11(2) the assessee is required to make an application before the Assessing Officer for accumulating the income. The requirement is that the money so accumulated or set apart will remain invested or deposited in the forms and modes as specified under section 11(5). 9.1. The contention of the Assessing Officer is that the advances given out of the grant received by t....
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....owing details given in the statement of facts filed before the learned Commissioner of Income-tax (Appeals) : During the year under review, the appellant-society received grant-in-aid to the extent of Rs. 182.33 crores in four instalments. The said grant has been released to the appellant-society with the under taking that entire money of the grant so released shall be spent on specified projects as per the grant sanction letter issued by the Government of India in persuasion of office memorandum dated August 31, 2005. The appellant-society invariably keeps this money in fixed deposits with the bank till it is needed for the purpose for which it is being sanctioned and released by the sanctioning authority on behalf of the Government of India. The income in the shape of inter est on such fixed deposit receipts with the bank cannot be considered as income of the appellant-society, in view of the fact that as per the terms and conditions of release of grant-in-aid, either the interest amount will be subtracted from the overall grant amount sanctioned to the appellant-society for the project or....