TMI Blog2020 (5) TMI 379X X X X Extracts X X X X X X X X Extracts X X X X ..... nds and the narration is transfer from income and expenditure account i.e. for ₹ 90 Lakhs . Amounts have been transferred to the different funds as tabulated above. While drawing up the income for the year under consideration, the assessee has very clearly pointed out that that all these amounts which are transferred to funds are not to be considered as application of income and accordingly, the income has been computed in the hands of the assessee. We find no merit in the exercise undertaken by the AO, which has been confirmed by the CIT(A), we reverse the findings of the CIT(A) in this regard and direct the AO to delete the aforesaid addition made in the hands of the assessee. Thus, Ground No.4 raised by the assessee is allowed. Addition made on account of alleged foreign grants received during the year on account of pending approval under Foreign Contribution Regulation Act (in short FCRA ) - whether the said foreign grant received by the assessee and the interest on the same are taxable in the hands of the assessee? - HELD THAT:- Bank interest earned on such deposits was in the form of foreign contribution and the same does not approve to the assessee till speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion claimed u/s 11 12 of the Act was disallowed to the assessee. The year under appeal before us in AY 2010-11 and in view of Proviso 2 of Section 15 of the Act, the assessee was receiving membership fee and also charging participation fee for organizing different seminars, conferences, the exemption claimed u/s 11 12 of the Act was denied. The case of the Revenue was that the assessee was not doing for the benefit of publication at large. It was further held that the principle of mutuality would not apply as the income of the assessee was not exclusively from its own member only. The Assessing Officer denied the exemption claimed u/s 11 12 of the Act to the assessee and it was upheld by the CIT(A) against which the assessee is in appeal before us. 5. The Ld.AR for the assessee pointed out that the issue raised, stand decided in favour of the assessee by the order of the Tribunal in ITA No.4837/Del/2012 relating to AY 2009-10 dated 06.06.2016. Our attention was drawn to para 11 at page 83 in this regard. The Ld.AR for the assessee further pointed out that the Hon ble High Court vide ITA No.857/2016 dated 14.12.2016 has upheld the order of the Tribunal. The SLP filed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the issue raised in Ground No.3 in this appeal was alternate plea made by the assessee, on without prejudice basis, it would become academic incase Ground Nos. 1 2 are allowed. Hence, Ground No.3 is dismissed. 11. Now, coming to the next issue vide Gorund No.4 wherein the assessee is aggrieved by the orders of the authorities below in holding that since the assessee was not entitled to claim deduction u/s 11 of the Act then the corpus donation was treated as income of the assessee. 12. The Ld.AR for the assessee drawn our attention to the audited balance sheet and income expenditure account which is at page 9 of the Paper Book and pointed out that the surplus of the year was transferred to funds under different heads i.e ₹ 80 Lakhs ₹ 90 Lakhs. He stressed that the said amounts which were added by the AO were not received in the year but transferred profits of the year. Our attention was drawn to Schedule (1) at page 10 of the Paper Book which talked of the corpus funds under which ₹ 90 Lakhs was transferred under income expenditure account then our attention was drawn to Schedule 4, 5 6 where amounts were again transferred from income expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it in the exercise undertaken by the AO, which has been confirmed by the CIT(A), we reverse the findings of the CIT(A) in this regard and direct the AO to delete the aforesaid addition made in the hands of the assessee. Thus, Ground No.4 raised by the assessee is allowed. 16. Next issue raised by the assessee vide Ground No.5 against the addition of ₹ 64,72,647/- made on account of alleged foreign grants received during the year on account of pending approval under Foreign Contribution Regulation Act (in short FCRA ). 17. Briefly the facts relating to the issue, the AO vide para 13.1 notes from the schedule 7A of the balance sheet that during the year foreign grant received and shown under the head Foreign Grunt pending approval and utilization . The grant was received for Simba project and Stadium Project amounting ₹ 33,68,659/- and ₹ 9,93,520/- respectively and an amount of ₹ 1,10,468/- was earned as interest thereon. The amount totaling ₹ 64,72,647/- received on account of Foreign Grants and interest thereon has not been taken as receipts in the I E A/c for the period under consideration. Since the assessee was following cash system ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reon. The corresponding credits have been shown in the Balance Sheet under the Foreign grant pending approval and utilization . The grants and interest earned have not been considered as income of the year for computation of income under section 11 of the Income tax Act. 23. In the note, it was clearly pointed out that the assessee had applied to the Ministry of Home Affairs for permission to accept foreign contribution received. Further, the amount was kept in foreign contribution designated bank account pending approval of Ministry of Home Affairs. Further, the bank interest was also earned on such deposits which was shown as ₹ 1,10,468/-. The question which arises is whether the said foreign grant received by the assessee and the interest on the same are taxable in the hands of the assessee. The certain FAQs have been answered by the Ministry of home Affairs on the said foreign grant and vide Question No.15, it has been clarified that interest of any other income earned from foreign contribution was to be considered as foreign contribution; the answer was yes . Further, vide Question No.31, the query raised was it was pointed out D 24. In case, the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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