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2016 (11) TMI 119 - HC - Income TaxTreatment to grant and the interest earned thereon as income of the Appellant-society - Appellant guided by the directions of the Government of Karnataka - Held that:- When the assessee is to act as a custodian of the Government money released to the assessee by way of a grant and the interest thereon is also to be utilised as per the terms and conditions of the grant, the view taken by the Tribunal cannot be sustained for two reasons. One is that such cannot be termed as ‘income’ of the assessee and another is that even if the addendum is issued by the Government for controlling the utilization of the amount of interest on the deposit at the later date the character of the money would remain the same and addendum can be termed as only by way of a clarification. It was not a matter where the question was to be considered with the retrospectivity as observed by the Tribunal. When the assessee is held as a custodian and the full command for utilization of the money including interest earned thereon remains with the Government, same cannot be termed as income of the assessee. The impugned order passed by the Tribunal is set aside and the questions are answered in favour of the assessee
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