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TMI Blog2012 (11) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... r for the sake of convenience. 2. First, we take up the appeal for the assessment year 2005-06, I.T.A.No. 490/Ahd/2011. The grounds raised by the revenue are as under: "1. The learned CIT(Appeals) has erred in law and on facts of the case in holding that grants received under "Pradhan Mantri Gram Sadak Yojana" of Govt. of India are not the assessee's income. 2. The learned CIT(Appeals) has erred in law and on facts of the case in deleting the addition of interest on account of unutilized grants so received are not the assessee's income, which was received under "Pradhanmantri Gram Sadak Yojna". 3. On the facts and circumstances of the case the Ld. CIT(A) ought to have upheld the order of the Assessing Officer. 4. It is therefore prayed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2005, i.e. with effect from the F.Y. 2005-06 relevant for the Assessment Year 2006-07. It is therefore clear that the entitlement of operations of Sections 11, 12 and 13 of the Act were available to the assessee w.e.f. A.Y. 2006-07. As such, the assessee was not entitled for benefit of Sections 11 & 12 of the Act for the Assessment Year 2005-06. Since the provisions of Sections 11, 12 and 13 were not applicable to the assessee's case for want of registration u/s 12AA of the Act in the assessment year 2005-06; assessment was completed on total income of Rs.36,91,20,260/- without giving effect to sections 11, 12 and 13 of the Act." 2.2 Being aggrieved, the assessee carried the mater in appeal before Ld. CIT(A) who has decided this issue in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 in which it was certified that Gujarat State Rural Road Development Agency (GSRRDA) i.e. the assessee is a non profit agency and PMGSY is 100% centrally planned scheme of Central Government for which work is being executed by GSRRDA. He also submitted that as per this certificate, Government of India provides funds to the GSRRDA in the shape of grant and aid on the detailed project report approved by the Government of India and the funds are kept in the Public Sector Bank for deployment of expenses concerning to PMGSY work and few administrative expenses only. It is also certified that the funds remained unutilized earn interest and such interest income and miscellaneous receipt is recycled as grant in aid for PMGSY work to executing agen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng: i) Grants received by the appellant under 'Pradhan Mantri Gram Sadak Yojana' of the Government of India are for specific purpose and cannot form appellant's income, ii) In the context, the treatment given by the appellant to the receipts in its books of account are of not much consequence for income tax assessment, iii) On similar footing the interest accrued on unutilized grants does not belong to the appellant and therefore cannot be treated as its income. I see no reason disagree with the order and therefore decide the issue as decided-above." 2.6 From the above para of the order of Ld. CIT(A), we find that it is noted by Ld. CIT(A) that in the fist round, the tribunal has already admitted the additional ground for setting aside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received under" Pradhan Mantri Gram Sadak Yojana." 3. On the facts and circumstances of the case the Ld. CIT(A) ought to have Upheld the order of the Assessing Officer. It is, therefore, prayed that the order the learned CIT(Appeals) may be set aside and that of the A.O. be restored the above extent." 3.1 Ld. D.R. supported the assessment order whereas the Ld. A.R. supported the order of Ld. CIT(A). At this juncture, it was pointed out by the bench that as per the assessment order, the assessed income is 'nil' even after making addition in respect of grant received and interest income because the A.O. has allowed the claim u/s 11 of the Income tax Act, 1961. It was pointed out by the bench that in this view of the matter, the appeal fil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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