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2014 (1) TMI 1764 - AT - Income TaxEligibility of exemption u/s 12A - grants and advances or loans receipts - Held that:- As where the authority had been constituted by the Government for the specific purposes of carrying on the activities of the Government and where the grants and advances or loans are disbursed by the Government to the assessee, the said grants, advances cannot not be held to the income of the assessee as the said grants/advances are released to the assessee for the specific purposes for carrying on the development work. In the facts of the present case the Government of Haryana had given a grant of ₹ 25.10 crores during the financial year 2007-08 for the specific purposes of utilizing the same in providing infrastructural facilities to the allottees of residential plots under Mahatma Gandhi Gramin Basti Yojana. The assessee during the year under consideration had received ₹ 25.10 crores on 28.3.2008, which could not be utilized for the specific purposes before the end of the year, which in turn was utilized in the succeeding years for the said specific purposes. In the totality of the facts and circumstances, where the assessee was acting on the directives of the Government of Haryana in implementing the scheme of the Government of Haryana, the grants so received by the assessee were not the income of the assessee and do not form the corpus of the assessee. Such grants are not donations or voluntary contribution under section 12 of the Act and thus the same should not be considered as income of the assessee for the relevant assessment year. The assessee had shown the said amounts as receipts in the receipts and expenditure account but the same in no manner can be held to be the income of the assessee and were not assessable in the hands of the assessee for the relevant assessment year, as no part of the said grants had been utilized for the specific purposes for which it was granted, before the close of the year. Thus the grant of ₹ 25.10 crores received by the assessee during the year under consideration is not the income of the assessee for the relevant assessment year. In view thereof, the said grant was received by the assessee for the purpose of disbursement for the promotion of the schemes of Government of Haryana and was not its income as the assessee was acting as a nodal agency for the disbursement of the grants only. Accordingly, we direct the Assessing Officer to delete the addition of ₹ 25.10 crores in the hands of the assessee. - Decided in favour of assessee.
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