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2011 (4) TMI 1410 - ITAT AHMEDABADGrant to Co-operative Societies - Deductible Expenditure u/s 36(1)(xii) - As per agreement, if the utilization of grants is not as per the objectives laid down in the agreement, then such grants would be converted into interest free loan or interest bearing loan - As per AO as such grants were conditional loan and were not expenditure - CIT(A) confirms the disallowance HELD THAT:- We find considerable force in justification of the assessee whether the alleged non-refundable grants given in the previous year, relevant to the AY under appeal are from grants received or not needs verification at the end of the AO. In this context, as per decision in case of OIL INDUSTRY DEVELOPMENT BOARD. VERSUS ASSISTANT COMMISSIONER OF INCOME-TAX. [2009 (3) TMI 225 - ITAT DELHI-E], relied on by assessee, expenditure incurred by way of disbursement of grants for objects and purposes authorised by the Act is allowable as deduction under section 36(1)(xii). The plea of assessee that non-refundable grants sanctioned, are claimed as deduction only when funds are already utilized/Fund Utilisation Report (FUR) are received, also needs verification at the end of the AO. We, therefore, set aside the order of the CIT(A) on this issue and restore the matter back to the file of AO with the direction that AO may verify both the aforesaid contentions and re-adjudicate the disallowance afresh, after giving opportunity of being heard to the assessee. The assessee is also directed to furnish complete details to Assessing Officer, in this regard, for verification - Matter restored back
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