TaxTMI 
TaxTMI 
2022 (6) TMI 1065
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....-in-after referred to as "the Act") relevant to the Assessment Year 2015-2016. 2. The Revenue has raised the following grounds of appeal: 1. Whether the ld. CIT(Appeals) has erred in law and facts by holding that proviso to section 2(15) of the IT Act, 1961 is not applicable to the assessee, when the Assessing Officer has clearly brought out that the assessee is covered under first proviso to section 2(15) of the I.T. Act and therefore not eligible for claim of exemptions under section 11 & 12 in view of the provision of section 13(8) of the Act. 2. Whether the CIT(A) has erred in the law and on facts in a lowing the Government grants of Rs. 4,63,13,000/- holding that it is corpus fund received towards specific projects....
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....pment. The assessee-trust is duly registered u/s. 12AA of the Act. 5. The AO during the assessment proceedings found that the activities of the assessee are covered under 1 and 2 proviso of section 2(15) of the Act and therefore benefit of exemption u/s. 11 of the Act to the assessee is not available. Thus the AO treated the amount of Government Grant of Rs. 4,63,13,000/- as income and accordingly added to the total income of the assessee. 6. The aggrieved assessee preferred an appeal to the Ld. CIT(A), who held that the activities of the assessee are not covered under 1 and 2 proviso of section 2(15) of the Act. Therefore, the corpus fund received from the Government as a grant cannot be treated as income of the assessee. Thus, the L....
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....r testing, calibration and consultancy for the purpose of achieving belter and standard quality of electronic and electrical products and equipments, including computers, communication equipment, instrumentation, process contra! instruments and electrical equipments, for benefit of users of such equipments and products and for general public and for that purpose to carry out calibration of testing and measuring equipments for parameters such as temperature, pressure, electronic including electrical -parameters and dimensions, environmental testing, type testing and evaluation of electronics, components and products and burn in and screening test of components and it has also to provide training in quality awareness, testing and calibration ....
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.... held that merely because there was incidental surplus generated out of the activities of the trust carried out for the objects of the trust, it could not mean that the trust was engaged in the business activity and hit by provision of Section 2(15) of the Act. 14. Insofar as the grant of Rs. 6,18,22,000/- received by the assessee-trust from the Government of Gujarat is concerned, it is observed that the said grants were directly taken by the assessee-trust to the corpus funds in the balance-sheet. The Assessing Officer, however, did not accept this treatment given by the assessee-trust and treated the same as income of the assessee mainly on the ground that there was no specific direction of the donor that the said grants constitu....
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....s not expressly made clear that the grants were being made available to form the corpus of the Trust and to be applied for such purpose, it was held by the Hon'ble jurisdictional High Court after considering the entire purport of the scheme that the grants made available to the assessee-trust for implementing the scheme in a particular manner cannot be treated as income of the assessee-trust. In our opinion, the ratio of this decision of Hon'ble Gujarat High Court is squarely applicable to the facts of the present case and respectfully following the same, we uphold the impugned order of the learned CIT(A) a lowing the claim of the assessee that the government grant of Rs. 6,18,22,000/- received by the assessee-trust towards specific....
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....grieved by the order of the Ld. CIT(A), the Revenue is in appeal before us. 15. Both the Ld. AR and Ld. DR vehemently supported the order of the authorities below as favourable to them. 16. We have heard the rival contention of both the parties and perused the materials available on record. At the outset we note that this tribunal in its own case bearing ITA nos. 808 & 857/Ahd/2018 for A.Y. 2014-15 involving the identical facts and circumstances have decided the issue in favour of the assessee and against revenue. The relevant extract of the order is reproduced as under: 21. We have heard the arguments of both the sides on this issue and also perused the relevant material available on record. As agreed by the learned represen....