TMI Blog2012 (4) TMI 614X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of the undertaking. The giving of financial aid or subsidy to the aforesaid committee, which admittedly is not carrying on any business, is at the discretion of the Government or Sugar factories. Thus, the grant-in-aid in question was not a product of the normal business activities of the assessee committee, assessed by the AO as a local authority. Therefore, such a grant-in-aid could not be termed as a revenue receipt so as to form part of the total income. As already pointed out, the ld. CIT(A) concluded that the aforesaid funds received by the assessee from State Government and sugar factories have been spent only for those specific projects and there was no surplus with the assessee. - ITA No. 1541/Del/2008 - - - Dated:- 4-4-201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sulted in surplus of income. 4. That the order of the learned CIT(A) be set aside and that of the AO to be restored. 2. At the outset, none appeared before us on behalf of the assessee despite service of notice of hearing through the JCIT Range-2,Muzaffarnagar[copy of her letter dated 23.12.2011 on record] on the assessee on 23.12.2011.Earlier also none appeared on behalf of the assessee. In these circumstances, considering the nature of issue, the Bench decided to dispose of the appeal after hearing the ld. DR. 3. Facts, in brief, as per relevant orders are that return declaring loss of Rs.Rs.16,71,135/- filed on 31.10.2006 by the assessee, a local authority, was selected for scrutiny with the service of a notice u/s 143(2) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted that these amounts were provided by the U.P. Government and Sugar Factories for construction of roads and were not liable to tax. However, the AO did not accept the submissions of the assessee and added the aforesaid two amounts to the total income, rejecting the claim for exemption by the assessee. 4. On appeal, the ld. CIT(A) allowed the claim of the assessee while relying upon decision dated 24.02.2006 of the ITAT G Bench in the case of various Ganna Parishads (of Saharanpur District), in I.T.A. nos.2812 to 2818/Del./2005 and relevant cross objections, in the following terms:- From the above reasoning, it transpires that a) Various amounts, like Ansh Dan and Nirman Yojna Fund, received and to be necessarily spent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were in the nature of income. On careful consideration, however, I agree with the appellant s contention that the Assessing Officer has apparently missed to appreciate that these amounts have been spent for special project of road construction; because of which amount of ₹ 1,62,17,420/- stands included on the payment side under the head road Construction . The Assessing Officer has failed to appreciate that these amounts of expenditure are over and above the regular road construction expense of ₹ 46,42,810/- being spent by the assessee. I also find that exhaustive details and evidence regarding such funds received and spent for special project, are on record. (e.g. the orders of Cane Commissioner and consequent sanction o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction of roads. In section 2(24) of the Act, it is declared that 'income' includes various items which are enumerated therein in clauses (i) to (xv). In the said section 2(24), such a grantin- aid has not been specifically included as an income or a revenue receipt. Therefore, considering the use of the word include in section 2(24), the word income shall be construed as comprehending not only those items which said section declares that these shall include but also such items as it signifies according to its natural import. Since section 2(24) has not declared that such a grant-in-aid shall be included in the income, the word revenue shall be construed as comprehending what it signifies according to its natural import. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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