2021 (12) TMI 541

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....hat :- "Whether on the facts and in circumstances of the case and in law, ld. CIT (A) has erred in allowing the benefit of exemption u/s 10(23C)(iiiac) to the assessee society particularly when the society is not substantially financed by the government in view of Rule 2BBB of the Income Tax Rules, 1962." 2. Briefly stated the facts necessary for adjudication of the controversy at hand are : Assessee being a society is into providing medical care in the field of liver and related diseases and is also registered under section 12A and 80G(5)(vi) of the Income-tax Act, 1961 (for short 'the Act'). During the year under consideration, assessee trust received funds from Government of NCT of Delhi to the tune of Rs. 1,57,93,89,043/-, o....

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....4.1.2 I have considered the assessment order and the submissions of the appellant. It is noted that the Assessing Officer has not taken into consideration the interest on capital grant for phase II building to be done by DMRC. In the audit conducted for Financial Year 2011-12, a specific para was raised regarding the interest income not being considered as a part of the grant with a direction that the amount is to be treated as part of the grant. The Assessing Officer has also noted that interest cannot be considered as a part of the Government's grant since the grants are not expected to be repaid by the recipient. In this regard, the appellant has invited reference to the grant release document of the Delhi Government in which it has,....

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....2014 prescribed the said percentage as 50%. Even if this percentage is considered, the grant received by the assessee including interest thereon which is to be included for the purpose of grant exceeds 50%. 4.1.4 Further, in the case of Commissioner of Income-tax, Bangalore v. Indian Institute of Management [(2014) 49 taxmann.com 136 (Karnataka)], the Hon'ble Karnataka High Court while considering the term 'wholly or substantially financed by Government' have held as under :- * The word 'Finance' means money given for establishing an Educational Institution or an University and not necessarily confined to the money given every year to such an institution by way of grant. Of course, in order to come to the said ....

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.... 4.1.5 In the case under consideration from the assessment orders of the earlier years, copies of which were filed during the appellate proceedings, it is noted that the fact that the Assessing Officers have noted that the institute has received funds from the Delhi Government for construction of infrastructure, for procurement of machinery, treatment of patients and extending research facilities etc. 4.1.6 In view of the discussion above, the facts of the case and relying on the decision of the Hon'ble Karnataka High Court in the case of Commissioner of Income-tax, Bangalore v. Indian Institute of Management (supra) wherein the Hon'ble Court have considered the meaning of the term 'wholly or substantially financed by G....