TMI Blog2011 (4) TMI 1332X X X X Extracts X X X X X X X X Extracts X X X X ..... reated as taxable income being separate from the grants-in-aid. The CIT(A) set aside the additions holding that tied-up grants will not constitute income of the assessee. It was further held that interest received by the assessee was to be treated as part of the grant. HELD THAT:- it was held that grants-in-aid received from the Government for specific purpose cannot be treated as voluntary contribution or as taxable income of the society. In M/s Punjab Energy Development Agency [ 2009 (7) TMI 654 - PUNJAB HARYANA HIGH COURT] it was held that interest received by the assessee on the amount of grant deposited in the bank was also in the nature of grant itself. Therefore, the view taken by the Tribunal is consistent with the view alread ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that assessee failed to spend 85% of its income as required for exemption under Section 11 of the Act. It was further held that tied-up grants were at par with voluntary contributions and were liable to be treated as income of the assessee. The assessing officer also held that interest income was to be treated as taxable income being separate from the grants-in-aid. The CIT(A) set aside the additions holding that tied-up grants will not constitute income of the assessee. It was further held that interest received by the assessee was to be treated as part of the grant. This view has been upheld by the Tribunal as follows:- ......The assessee received certain grants from the Government with a stipulation that such grants are to be util ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out of the unspent balance of grants received from the Government for a specific purpose. The interest income so earned has been taxed by the Assessing Officer assessable in the hands of the assessee as income from other sources . In this connection, the Commissioner of Income-tax (A) in para 10 of his order, has reproduced clause (xii) of the Terms Conditions governing the grant-in-aid, which reads as under:- The grantee institution should maintain separate audited account for the project. If it is found expedient to keep a part or whole of the grant in a bank account earning interest, the interest, thus earned should be reported to this Department. The interest so earned will be treated as a credit to the grantee to be adjusted to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the appellant. 4. It is not disputed that identical issues have already been dealt with by this Court vide order dated 12.12.2008 in ITA No.190 of 2008 Commissioner of Income Tax, Chandigarh-II Vs. M/s Punjab State Sports Council, Chandigarh and order dated 31.7.2009 in ITA No.666 of 2008 Commissioner of Income Tax, Chandigarh-II Vs. M/s Punjab Energy Development Agency. In M/s Punjab State Sports Council, Chandigarh it was held that grants-in-aid received from the Government for specific purpose cannot be treated as voluntary contribution or as taxable income of the society. In M/s Punjab Energy Development Agency it was held that interest received by the assessee on the amount of grant deposited in the bank was also in the nature of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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