TMI Blog2022 (9) TMI 1186X X X X Extracts X X X X X X X X Extracts X X X X ..... 205 - ITAT HYDERABAD-B ] the issue regarding treatment of tide up grants was considered by the Tribunal wherein it was held that voluntarily contributions covered by Section 12 are those contributions freely available to the assessee without any stipulation, which the assessee can utilize towards his objectives according to its own discretion and judgment. The tide up grants for a specific purpose would only mean that the assessee which was voluntarily organization, had agree to act as a trustee of a special fund granted by the donor with the result that it need not be pooled or integrated with the assessee is normal income or corpus. We do not find any legal infirmity or error in the order of the CIT(A) in deleting the addition made by the A.O and we find no merits in the grounds of Appeal of the Revenue. - I.T.A. No. 225/DEL/2018 And I.T.A. No. 2356/DEL/2018 And I.T.A. No. 2357/DEL/2018 - - - Dated:- 23-9-2022 - Shri Shamim Yahya, Accountant Member And Shri Yogesh Kumar U.S., Judicial Member For the Assessee : Ms. Rano Jain, Adv and Ms. Mansi Jain, CA For the Department : Shri Sumit Kumar Verma, Sr. D. R.; ORDER PER YOGESH KUMAR U.S., JM These thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claring total income at NIL after claiming application of income as per provision of Section 11 12 of the Act. The return was processed u/s 143(1) of the Act, the case was selected for scrutiny and the notices were issued to the assessee. The assessee has participated in the assessment proceedings through its representative. During the assessment proceedings, it has been noticed that as per the balance sheet, the assessee has incurred expenses in foreign currency outside India under the head Expenses on Specialized fairs and Buyers Seller Meet Abroad amounting to Rs. 3,24,65,367/-. As per the A.O, the same is in contravention to provision of Section 11(1) (c) of the Act, before the approval of Central Board of Direct Taxes. 4. It is the case of the assessee before the Assessing Officer that as per Section (11)(1)(a) of the Act following income shall not be included in the total income of the previous year of the person in receipt of the income derived from property held under trust wholly for charitable or religious purpose, the extent to which such income is applied to such purposes in India and where any such income is accumulated or set apart for application to such purp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt are as under:- a). Grants have to be kept in separate account with State Bank of India/ its subsidiaries/Nationalized Banks. b). Detailed account of each payment are to be kept together with the documents/vouchers etc. as evidence of actual expenditure. c). Grant is not to be diverted or utilized for the purpose other than that for which it is sanctioned. It has also been mentioned that the execution of project/study for which the grant is made shall not be entrusted to another institutions or organizations. d). The accounts of project shall be open for audit by the sanctioning authority and also by the Pay and Account Office of the Department of Commerce as per Rule 211 of tire GFR and will be subject to audit by the C AG of India. e). Any unspent amount with interest at the rate of 10 per cent from the date of release of the fund is to be surrendered to the Government of India. 11. Thus, it is evident that the grants are given specifically for participation in a particular events held in abroad, the grant approval includes a condition that a separate account for the projects have to be maintained. The assessee has utilize the funds as per the terms and condi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The grants which are for specific purposes do not belong to the assessee-society. Such grants do not form corpus of the assessee or its income. Those grants are not donations to the assessee so as to bring them under the purview of section 12 of the Act. Voluntary contributions covered by section 12 are those contributions freely available to the assessee without any stipulation which the assessee could utilize towards its objectives according to its own discretion and judgment. Tied-up grants for a specified purpose would only mean that the assessee, which is a voluntary organization, has agreed to act as a trustee of a special fund granted by Bread for the World with the result that it need not be pooled or integrated with the assessee's normal income or coiyus. In this case, the assessee is acting as an independent trustee for that grant, just as same trustee can act as a trustee of more than one trust. Tied-up amounts need not, therefore, be treated as amounts which are required to be considered for assessment, for ascertaining the amount expended or the amount to be accumulated. 11. The assessee should have actually credited that, grant in the personal account of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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