2021 (8) TMI 291

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.... following three grounds of appeal:- "1. The Ld CIT(Appeal) has erred in ignoring the fact that the accounts of the assessee were defective as the assessee failed to incorporate receipts from " Government grant account" to the extent of Rs. 25,60,92,254/- in the Income & expenditure A/c; 2. The Ld CIT(Appeal) has failed to appreciate that the assessee has shown expenditure of Rs. 23,76,20,704/- against specified grants out of which an amount of Rs. 21,20,71,634/- has been shown as liability payable to own branches 3. The Ld CIT(A) has overlooked the fact that accounts maintained by the respective branches doesn't reflect corresponding amount receivable from the Head Office and Assessing Officer has made addition of Rs. 11,13,54,150/....

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....ith return of income. Thus, Assessee has violated fundamental conditions of registration u/s 12A of the Act. The ld AO noted that expenditure to the extent of Rs. 10,24,54,014/- and Rs. 89,00,136/- on the head office account are created by the mere transfer entry by crediting the branch account without corresponding expenditure in the branch account. The same cannot be allowed as genuine expenditure. Therefore, the sum of Rs. 11,13,54,150/- was disallowed. The ld AO further proposed to the Director of Exemption proposal for withdrawal of registration u/s 12A of the Act. The assessment order u/s 143(3) was passed on 30.12.2011 5. The Assessee preferred an appeal before the ld CIT(A) who deleted the above addition and therefore, the AO is ag....