2023 (6) TMI 259

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... are that the assessee, Howrah Improvement Trust, is the State Level Nodal Agency of Government of West Bengal constituted under Howrah Improvement Trust Act for construction of Roads, Bridges, Sewerage Systems, Buildings, Playgrounds, Auditoriums, Construction of Buildings for Educational Institutions etc on behalf of Government of West Bengal within the district of Howrah. The Trust functions under Urban Development Department of Government of West Bengal. The Trust receives specific earmarked grants from Government of West Bengal through Urban Development Department for implementation of various infrastructural projects within the district of Howrah. The accounts of the Trust are to be maintained as per Government Rules and audit is done....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....donation and the same will not be treated as income of the trust/institution. However, any other donation/grant is not a corpus donation. He further observed that in the instant case, there was no express direction either from the Government of West Bengal or Government of India that the funds received by the assessee would form part of the corpus of the assessee-institution. He further observed that the basic nature of the grant, was that it was meant for application and not for keeping with the assessee's corpus. He further observed that the assessee did not apply the income in the year in which the same was received. If the assessee wished to apply any income of this year in the next year then it must take recourse to explanation 2 to se....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....s were given by the Government. Therefore, the same did not constitute income of the assessee and hence was not routed through profit and loss account. The ld. counsel, in this respect, has relied upon the decision of the Hon'ble Punjab and Haryana High Court in the case of 'CIT vs. State Urban Development Society' passed in ITA No.210 of 2011 vide order dated 19.10.2011. 6. The undisputed facts are that the grants were given to the assessee for implementation of various infrastructure schemes. That the grants received by the assessee/state agency did not belong to the assessee. The grants did not form corpus of the assessee nor it was income of the assessee u/s 11 of the Act. Such grants were not the donations or voluntary contribution u/....