TaxTMI 
TaxTMI 
2016 (1) TMI 1525
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....ified in upholding the addition of Rs. 1,40,17,320/- in respect unutilized grant in aid of Rs. 1.00 Crores which was received by the council from Govt. of India with specific direction for Development of Infrastructure i.e. for the maintenance/development of Building and other facilities. Moreover grant was released by Govt activity wise not year wise. Accordingly said addition is not sustainable in the eyes of law." 2. The facts of the case are that the assessee institution i. e. H. P. Nursing Registration Council is a regulatory body established by the State Government of Himachal Pradesh through its Act i. e. H.P.N.R.C. Act, 1977. It has its Act of 1977 which came into force w.e.f. 1 August, 1978 vide Health & Family Welfare....
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....e by way of proper training and education of Nurse, Midwifes, health visitors etc. 2(ii) The reply of the assessee was not found satisfactory by AO on the ground that mixed method of accounting adopted by the assessee was not permissible as per the provisions of section 145(1) of the Act. and since the assessee institution was not registered u/s 12AA of the Act for the year under consideration. Relying on the case law in the case of CIT Vs. Gem & Jewellery Export Promotion (Bom.) the AO held that as per the provisions of section 11 the assessee was required to spend 85% of the total income of Rs. 1,48,49,196/- i.e. Rs. 1,26,21,817/- during the year on charitable or religious purposes. However the assessee had only utilized Rs.&....
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....ants of Rs. 1.00 Crore was received by council with specific directions and council is fully accountable to the money spent out of grants and if amount remain unspent same need to be refunded to Govt. Moreover our contention that Govt. grants are given activity wise and not year-wise also not accepted by the Ld. A.O. We have specifically pleaded that Govt. grants are given activity wise and not year wise. The activity may continue for years together or may end in any year itself at the end of the activity. The remaining unutilized amounts have to be refunded to Govt. of India since grants are not year-wise and these cannot be considered as income of the year. Reference was made to the Citation (2014) 44 taxmann.com 233(Chandigarh-Tribu....
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....ing failed to spend 85% of total' receipts the action of AO is upheld and appeal of assessee is dismissed." 5. The ld. counsel for the assessee reiterated the submissions made before authorities below and referred to PB-11 which is Income & Expenditure account ending 31.03.2010 and PB-46 which is a letter of the Government of India, Ministry of Health & Family Welfare ( Nursing Section) dated 18.03.2009 through which the amount of Rs. 1 Crore was received by assessee for up-gradation/strengthening of nursing services under human resources for health. He has, therefore, submitted that same could not be treated as income of the assessee. He has also relied upon order of ITAT Chandigarh Bench in the case of H.P. Government Energy D....
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....the assessee to be exempt in any other provisions of law. However, assessee made a claim of income to be exempt under section 10(23C)(iiiab) of the Income Tax Act being substantially financed by the Government before the authorities below. The ld. CIT(Appeals) specifically found that this provision is not applicable to assessee because assessee is neither a University nor Educational Institution solely for educational purposes which is also a condition precedent for claiming exemption of income under section 10(23C)(iiiab) of the Income Tax Act, therefore, such a claim of assessee was not tenable. No material is produced before us to show that assessee satisfied the requirements of Section 10(23C)(iiiab) of the Income Tax Act. Therefore, th....