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2021 (6) TMI 1033 - AT - Income TaxDeduction u/s 11(1) denied - amount of unutilized grant in aid treated as income - HELD THAT:- The source of funding for the various projects run by the society is from government grants, state government grants, FCRA Funds/contributions from various countries and donations etc. The accounts of the assessee are subject to statutory audit and also audit by the Government Agencies like AGCR and by the auditors appointed by the funding agencies. These facts were not disputed by the AO. The grant/funds received from Government, various Ministries and grants from foreign contributions/funds are in pursuance to agreements/contracts and in terms thereof the amount of unutilized grants is liable to be refunded. AO while passing an order u/s 143(3) has wrongly considered the amount of unutilized grant in aid as income and disallowed on ad-hoc basis from the expenses incurred or funds applied for charitable purposes. AO has also wrongly denied deductions u/s 11(1) to the society which is not just and proper once, the assessee society has given the details of the unutilized grant in aid and expenses and fulfills the criteria prescribed under Section 11(1) - CIT(A) has taken a proper cognizance of all the relevant facts thereby calling remand report from the AO. The Assessing Officer has not given any adverse comment in respect of the remand report regarding the assessee’s contentions before the CIT(A). Therefore, there is no need to interfere with the findings of the CIT(A). The appeal of the Revenue is dismissed.
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