TaxTMI 
TaxTMI 
1982 (6) TMI 28
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....as to undertake market studies in individual foreign countries and carry out such other object as may be necessary for the promotion of export of gems and jewellery. There is no dispute that the assessee-company is company whose income is applicable only to charitable purposes as defined in s.2(15) of the I.T. Act, 1961. The assessee-company receives grants in-aid from the Govt. of India. Some of the conditions on which these grants-in-aid are given are as follows : (i) The funds should be kept with the State Bank of India ; the total expenditure should not be more than the expenditure approved by the Central Govt. for each project; separate accounts should be kept for code and non-code projects and the accounts were to be audited by cha....
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....d and amounts received from the Government for working out the surplus under s. 11(1)(a) of the Act for each of the two years under consideration. The Department filed appeals for these years before the Income-tax Appellate Tribunal and the Department's case was that the grants-in-aid could not be considered as voluntary contribution for the purpose of s. 12(1) of the Act having regard to the fact that the grants were made subject to conditions referred to earlier. The Tribunal confirmed the view of the AAC that the amounts given by the Government were voluntary contributions and were not in the nature of any price paid for any benefit or privilege nor they were for any consideration. The conditions imposed by the Government, according t....
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....-in-aid are made by the Government to provide certain institutions with sufficient funds to carry on their charitable activities. The institutions or associations to which the grant is made have no right to ask for the grant. It is solely within the discretion of the Government to make grants to institutions of a charitable nature. The Government does not expect any return for the grants given by it to such institutions. There is nothing which is required to be done by these institutions for the Government, which can be considered as consideration for the grant. To borrow the language of the Lord President, in Society of Writers to Her Majesty's Signet v. IRC [1886] 2 TC 257, 272 (C. Sess), who was considering the meaning of the words " vol....
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....ney, if it be given within a certain period, shall be exempt from liability." It is difficult to see how any of the conditions attached to the grant affects, in the instant case, the voluntary nature of the contribution. The conditions referred to above and relied upon by the learned counsel for the Revenue are merely intended to see that the amounts are properly utilised. These conditions did not, therefore, detract from the voluntary nature of the grant. Mr. Joshi has relied on a decision in IRC v. National Book League [1958] 34 ITR 461 (CA). The National Book League was a company limited by guarantee and was a body established for charitable purposes only. But it had its headquarters in London. The League provided limited club faci....