TMI Blog2021 (12) TMI 541X X X X Extracts X X X X X X X X Extracts X X X X ..... ian Institute of Management [ 2015 (2) TMI 360 - KARNATAKA HIGH COURT] as the percentage of grant-in-aid to the assessee to the year under consideration is at 50.85% (which is inclusive of interest). Even otherwise, Hon ble High Court has held that the word wholly and substantially financed by the Government cannot be confined only to annual grants, apart from providing annual grant, if Government granted land and invested money in building and infrastructure etc. all that has to be taken into consideration. So, the case of the assessee is clearly covered under Rule 2BBB of IT (Thirteenth Amendment) Rules, 2014 having total grant-in-aid to the tune of 50.85% - in view of the matter, we find no infirmity or perversity in the impugned orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he total income of the assessee trust). Declining the contentions raised by the assessee, AO denied the exemption sought by the assessee u/s 10(23C)(iiiac) of the Act on the ground that this section applies to the bodies substantially financed by Government and thereby assessed the total income at ₹ 20,72,34,969/-. 3. Assessee carried the matter before the ld. CIT (A) by way of filing the appeal who has directed the AO to allow exemption to the assessee u/s 10(23C)(iiiac) of the Act for the year under consideration by partly allowing the appeal. Feeling aggrieved by the order passed by the ld. CIT(A), the Revenue has come up before the Tribunal by way of filing the present appeal. 4. We have heard the ld. Authorized Representati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the amount of interest earned on amount for phase II construction may also be included. Similarly directions were also given while releasing the 2nd and final installment of grants-in-aid during Financial Year 2011-12. Further, it has also been pointed out that as per Rule 230(8) of the General Financial Rules 2017, all interest or other earning against grants-in-aid or advances (other than reimbursement) released to any grantee institution are required to be mandatory returned to the Consolidated Fund of India. Hence the contention of the Assessing Officer that receipts on account of interest, etc. are to be not to be returned back is not correct. Hence, the grantsin- aid to the assessee during the year under consideration should be cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which it is established and how the said institution is financed, not only for establishing the same, even for running of such an Institution. [Para 4] The assessee has been established entirely with the budgetary support of the Government. It is an institution wholly or substantially financed by the Government. The fact that this institution was granted land by the Government of Karnataka to the extent of 100 acres and the Government of India has funded initially 100 per cent and it has permitted them to retain and spend the revenue so generated for the maintenance and growth and the Government of India is also granting grant every year is not in dispute. Under these circumstances, the contention of the revenue, that the gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the year under consideration. Ground of appeal no.1 is allowed. 6. We are of the considered view that the aforesaid order is passed by the ld. CIT (A) by applying the relevant Rules and law laid down by Hon ble Karnataka High Court in case of CIT vs. Indian Institute of Management (supra) as the percentage of grant-in-aid to the assessee to the year under consideration is at 50.85% (which is inclusive of interest). Even otherwise, Hon ble High Court has held that the word wholly and substantially financed by the Government cannot be confined only to annual grants, apart from providing annual grant, if Government granted land and invested money in building and infrastructure etc. all that has to be taken into consideration. So, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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