TMI Blog2011 (10) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... come under Sections 11 and 12 of the Act. - Revenue vehemently argued that the Society itself has reflected the grants received from Central and State Governments as income. Therefore, it is not open to the assessee to take a stand that such grants are not the income. The said aspect has been considered by the Tribunal, wherein, it has been held that reflection in the profit and loss account towards the income is not determinative. The entries in the books of account do not decide the nature of receipts. Since, the grants have been received by the assessee for disbursement and keeping in view the fact that the same cannot be utilized for any other purpose such as distribution for the poverty in furtherance to the object of the Schemes, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer found that the percentage of income used for charitable purposes is less than 85% and that the essential conditions of Section 11 and 12 of the Act have not been fulfilled by the assessee. Thus, the Assessing Officer finalized the assessment. In appeal, the Commissioner of Income Tax (Appeals), Panchkula granted relief to the assessee in respect of interest exemption from Section 11 of the Act, the amount disbursable due to imposition of model code of conduct. While upholding the order of the Assessing Officer that the gross amount received from the Central and State Governments for the purpose of disbursement to district authorities as income of the Society. Aggrieved against the order passed by Commissioner of Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... do not decide the nature of receipt and its taxability. The Tribunal also held that even if the amount is not disbursed due to imposition of model code of conduct by the Election Commission, the surplus at the end of the year cannot be included as income under Sections 11 and 12 of the Act. If the grant is not includable as income the surplus at the end of the year remaining unspent is not of any relevance. In respect of the Bank interest, the Tribunal found that the assessee has to keep funds in separate accounts and such interest is treated as part of the grants under respective Schemes to which said funds relate. Hence, with the said findings, the orders of the Assessing Officer and Commissioner of Income Tax (Appeals) were set aside. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
