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2020 (1) TMI 42 - AT - Income TaxExemption u/s 11 - whether objects of the appellant are "Charitable Purpose" as defined in Section 2(15) keeping in view the definition of "Charitable Purpose" in said sub-section being "Inclusive" and accordingly the provisions of Section 11 of the Act, have to be applied in assessment of its income? - HELD THAT:- The prime objects of the trust are to implement the NEIA scheme through ECGC for the benefit of medium and long-term exports. The assessee endeavor to promote exports from India and to protect the payment risks for transactions for which ECGC is unable to provide cover owing to lack of capacity or commercial consideration. In other words, the assessee is to provide insurance cover to promote exports from India and to protect payments risks. The assessee also aim at meeting the cost of insurance which ECGC would levy for project exports in certain circumstances. The assessee is required to implement such other schemes and programs as the Government of India may frame in this regard and undertake its activities as per the directions of Government of India. Since the dominant and prime object of the assessee is not to earn the profit in relation to trade, commerce and business, therefore, the exemption u/s.11 & 12 is not liable to be declined. Accordingly, we set aside the finding of the CIT(A) in this issue and allowed the claim of the assessee. Corpus contribution received by the assessee - HELD THAT:- Upon perusal of stated terms & conditions, it could not be said that the funds received by the assessee were not in the nature of voluntary contributions rather they were more in the nature of specific grants on certain terms and conditions and liable to be refunded, in case the same were not utilized for specific purposes. It is trite law that entries in the books of accounts would not be determinative of the true nature / character of the transactions and the same could not be held to be conclusive. Therefore, the mere fact that the assessee credited the receipts as corpus contribution, in our considered opinion, would not make much difference and would not alter the true nature of the stated receipts. The said funds / receipts, as stated earlier, were more in the nature of specific grants and represent liability for the assessee and liable to be refunded in case of non-utilization. Therefore, the same being capital in nature, could not be even otherwise brought to tax. For the said proposition, strength could be drawn from the decision in Pr.CIT V/s State Fisheries Development Corporation Ltd. [2019 (1) TMI 482 - SC ORDER] wherein similar receipts were held to be capital in nature and could not be brought to tax as income of the assessee - Decided in favour of assessee.
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