TaxTMI 
TaxTMI 
2025 (12) TMI 792
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....al are as under: - "1. Ld. Commissioner of Income Tax (A) has erred in law and facts by deleting the addition made of Rs. 1,70,77,516/- on account of amount surplus above 15% without appreciating the facts that the assessee instead of utilizing this amount or crediting this amount to income & Expenditure account, this sum was directly credited to Balance Sheet. 2. Appellant craves leave to modify/amend or add any one or more grounds of appeal." 2. The facts of the case are that the Society is registered under section 12A of the Income Tax Act, 1961 vide order dated 11.12.2006 of the ld. CIT, Varanasi. From a perusal of the papers submitted by the assessee as well as the data available online, the ld. Assessing Officer f....
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.... circumstances of the case because the capital grant received from the Ministry of Textiles, Government of India was in the nature of voluntary contribution made with specific direction to form part corpus of the trust and the same was to be utilized for specific purposes within the financial year itself. It was submitted that the grants so given, were utilized as required and the utilization certificate for the said grants, as certified by the Chartered Accountant, was furnished before the CIT(A). The ld. CIT(A), ongoing through the facts of the case, as well as the submissions made by the assessee noted that the grants had been received from the Ministry of Textiles, Government of India for meeting expenditure towards setting up of the in....
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....ete the same. 5. On the other hand, Sh. Akash Agarwal, C.A. (hereinafter referred to as the ld. AR) representing the assessee supported the orders of the ld. CIT(A) and submitted that voluntary contributions made with a specific direction to form part of the corpus of the trust or institution, should not be included in the total income of the assessee. Furthermore, it was submitted that the Assessing Officer had failed to consider the fact that the basic accounting principle was that funds received with specific direction of usage / utilization needed to be parked in the capital fund and was part of shareholders / promoters' funds and in this case was the funds of the Ministry of Textiles, Government of India. As an alternative argument,....
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....ved for setting up of the institute that would make them capital receipts, which are not income as per section 2(24) of the Income Tax Act and therefore, the sums would form part of the corpus, whether specifically mentioned or not. In the case of CIT vs. Gujarat Safai Kamdar Vikas Nigam in ITA No.1934 of 2009, the grant were received by the assessee trust from the Government of Gujarat for the scheme envisaged for implementation of certain Government programs and although it was not specially made clear that the grants were being available to form the corpus of the trust and to be applied for such a purpose, it was held by the Hon'ble Gujarat High Court, after considering the entire purport of the scheme, that the grants made available to ....