TaxTMI 
TaxTMI 
TaxTMI 
2018 (12) TMI 320
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....CIT(A) be cancelled and the order of the A.O. restored. 4. Appellant craves leave to modify/amend or add any one or more grounds of appeal. 2. At the outset, ld. A.R. of the assessee invited our attention to the order of the Tribunal in assessee's own case for assessment year 2012-13 and submitted that the issue involved in the present appeal is squarely covered in favour of the assessee by such order and even the grounds of appeal are similar except difference in amount. 3. The ld. D.R., however, relied on the order of the Assessing Officer. 4. We have heard the rival parties and gone through the material placed on record. We find that during assessment year 2012-13 vide order dated 31/10/2018 Tribunal on an appeal filed by the Revenue had adjudicated the following grounds of appeal:- 1. Ld. Commissioner of Income Tax (A) has erred in law and facts by allowing the assessee to take the Amount of Rs. 19,90,000/- lakhs in computation of income as capital expenditure, ignoring the fact that the assessee has claimed this capital grants of Rs. 19,90,000/- lacs as exempt u/s 11(1)(d) of the I.T. Act and is not taken in the Computation of Current Year. 2. Ld. Commissioner of Inco....
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....leading to the award of the Bachelors, Masters and Doctoral degrees in engineering and technology, management, science and arts in the area of petroleum and hydrocarbons and (iii) grant, subject to such conditions as the Institute may determine, degrees, diplomas, certificates or other academic distinctions or titles at various academic levels to candidates who have attained the prescribed standard of proficiency as judged on the basis of examination or on any other basis of testing and evaluation and to withdraw any such degrees, diplomas, certificates or other academic distinctions or titles for good and sufficient reasons, in addition to several other objects. 5.3 The appellant filed its return of income on 15.02.2014 declaring Nil income. The AO has framed the assessment determining the appellants income at Rs. 13,93,32,959/-. As per the facts available on record, the appellant had received certain amounts from the Govt. of India as Grants with specific purpose. The AO has treated these Grants as revenue in nature and has included the same in the income and expenditure account. The appellant has filed a copy of Balance sheet as on 21.02.2012. It is noticed, that the Institut....
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....on the same is to be applied towards the objects of the Institute. The Grant as such cannot be applied or utilized. 5.4 I have gone through the facts and circumstances of the case, as also the paper book filed by the appellant. The appellant has filed the Tax Audit Report, as filed along with the return of income as well as the copies of Notifications, in which it has been specifically laid down that the Grants are for purpose specific and cannot be used/applied as such. It is only the interest earned on the Grants received, that has to be applied. The AO was not justified in treating the Capital Grants as income. There is no dispute that the interest earned in the Grants has been accounted for by the appellant in its income. The notifications read as under:- 5.5 Letter dated 9th October 2006 issued from Ministry of Petroleum and Natural Gas, Govt. of India, Shastri Bhawan, New Delhi. 3. The President of the Interim Board of Trustees of the RGIPT Society, Shri D.M. Reddy, Executive Director (MRS), PBCL has informed that it would be prudent to have some funds at the disposal of the Society to meet incidental expenditure as the Society is simultaneously pursuing outlet activ....
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....ct authorities for implementation of various Schemes of Government of India and supervising the execution of Schemes. It has no discretion to utilize the amount as per own requirements. It also found that in case of non-utilization at tjhe close of the Scheme, the funds are to be refunded along with interest to the Government of India and State Governments. The grants received by fjhe assessee do not belong to the assessee Society. The grants do not form corpus of the assessee nor it is income of the assessee under Section 11 of the Apt. Such grants are not the donations or voluntary contributions under Section J12 of the Act. Thus, the grants received by the assessee should not be considered either as income or for ascertaining the amount expanded or amount to b>e accumulated. Provisions of Section 11 and 12 of the Act are not applicable for grants received by the assessee under the Schemes. It further held that the assessee is statutorily required to file its intention of expanding the accumulated funds in future by way of Form No. 10. The argument that the assessee has shown the entire amount as its income in the profit and loss account as not determinative of nature as the m....
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....concluded the there was no surplus with the assessee and therefore, there was no question of any taxable income. Admittedly, the grant-in-aid in question is a financial aid or subsidy given by the State Government of UP & Sugar Factories for the specific purpose of construction of roads. In section 2(24) of the Act, it is declared that "income 'includes" various items which are enumerated therein in clauses (i) to (xv). In the said section 2(24), such a grant in aid has not been specifically included as an income or a revenue receipt. Therefore, considering the use of the word "include" in section 2(24) the word "income" shall be construed as comprehending not only these items which said section declares that these shall include but also such items as it signifies according to its natural import. Since, section 2(24) has not declared that such a grant in aid shall be included in the income. The word "revenue" shall be construed as comprehending what it signifies according to its natural import. In relation to a business undertaking, the word "revenue" connotes incomings of the undertaking which are products of the normal working of the undertaking which are products of the norm....
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....in our minds that the Board's fund received under section 33-C of the local Act is not an income for profit and gains, is not dividend, is not voluntary contribution, nor is it covered by any one of the remaining clauses of sub-section (24) of section 2 of the Act. We, therefore, conclude that the Board's fund received and collected under the provisions of section 33C of the Act is not income within the meaning of subsection ((24) of section 2 of the Act, and is beyond the purview of the Act." In the present case the Grants were received by the appellant from Government of India for specific purpose. As per the notifications issued by Government of India it has been specifically laid down that these Grants are for specific purposes and only the interest earned on the same it to be used/applied for the purposes of the objects of appellant institute. The amounts received in Grants have to be held as deposits and only interest earned therein is to be applied towards objects of institute. The Grants as such cannot be applied or utilized. The appellant has accounted the interest earned on the Grants as its income. In view of the facts mentioned in para 5.2 to 5.7 of this o....