ACIT, Uttrakhand v. Uttranchal State Council for Science & Technology, Dehradun

ITA 3105/DEL/2009 | 2006-2007
Pronouncement Date: 31-07-2015 | Result: Dismissed

Appeal Details

RSA Number 310520114 RSA 2009
Assessee PAN AAATI2243F
Bench Delhi
Appeal Number ITA 3105/DEL/2009
Duration Of Justice 6 year(s) 28 day(s)
Appellant ACIT, Uttrakhand
Respondent Uttranchal State Council for Science & Technology, Dehradun
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2015
Appeal Filed By Department
Order Result Dismissed
Bench Allotted H
Tribunal Order Date 31-07-2015
Date Of Final Hearing 14-07-2015
Next Hearing Date 14-07-2015
Assessment Year 2006-2007
Appeal Filed On 03-07-2009
Judgment Text
ITA NO. 3105/DEL/2009 (A.Y. 2006 - 07) ACIT VS. UTTRANCHAL STATE COUNCIL FOR SCIENCE & TECHNOLOY 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H NEW DELHI BEFORE SHRI N.K. SAINI ACCOUNTANT MEMBER AND SHRI H.S. SIDHU JUDICIAL MEMBER I.T.A.NO. 3105 /DEL/20 09 A.Y. : 200 6 - 0 7 ACIT CIRCLE - 2 AAYAKAR BHAWAN 13 - A SUBHASH ROAD DEHRADUN UTTRAKHAND VS. UTTRANCHAL STATE COUNCIL FOR SCIENCE & TECHNOLOGY VASANT VIHAR PHASE - II DEHRADUN (PAN: AAATI2243F) (APPELLANT) (RESPONDENT) DEPARTMENT BY : SH. J.P. CHANDREKAR SR. D.R. ASSESSEE BY : SH. GAUTAM JAIN CA DATE OF HEARING : 15 - 0 7 - 201 5 DATE OF ORDER : 31 - 0 7 - 201 5 ORDER PER H.S. SIDHU : J M THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST THE IMPUGNED ORDER DATED 30 / 4 /20 09 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - I NEW DELHI ON THE FOLLOWING GROUNDS: - 1 . LD. CIT(A) - I DEHRADUN HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT IN THE YEAR UNDER CONSIDERATION THE APPELLANT HAS NEITHER RECEIVED ANY VOLUNTARY CONTRIBUTION AS TO ATTRACT PROVISION OF SECTION 2(2 4 )(IIA) OF THE I.T. ACT 1961. ITA NO. 3105/DEL/2009 (A.Y. 2006 - 07) ACIT VS. UTTRANCHAL STATE COUNCIL FOR SCIENCE & TECHNOLOY 2 2. LD. CIT(A) - I DEHRADUN HAS ERRED IN LAW AND ON FACTS BY HOLDING THAT THE ASSESSEE IS CERTAINLY NOT CARRYING ON ANY BUSINESS OR PROFESSIONAL ACTIVITY INCOME FROM WHICH COULD BE BROUGHT TO TAX UNDER CHAPTER IVD OF THE I.T. ACT 1961. 3. THE DECISION OF CIT(A) - I DEHRADUN IS ERRONEOUS IN LAW AS WELL AS ON FACTS. THE ORDER OF THE CIT(A) - I DEHRADUN DESERVES TO BE SET ASIDE AND ORDER OF THE AO BE RESTORED. 2. THE FACTS IN BRIEF ARE THAT T HE RETURN OF INCOME WAS FILED ON 31.10.2006 FOR THE AY 2006 - 07 DECLARING DEFICIT OF RS. 3 53 170/ - . THE RETURN WAS PROCESSED U/S. 143(1) OF THE INCOME TAX ACT 1961 (HEREINAFTER REFERRED AS I.T. ACT ) ON 9.1.2007. THE CASE OF THE ASSESSEE WAS SELECTED UNDER COMPULSORY SCRUTINY GUIDELINES OF CBDT. NOTICE U/S. 143(2) OF THE I.T. ACT DATED 22.5.2007 WAS SERVED ON 31.5.2007 FIXING THE DATE FOR HEARING ON 5.6.2007. IN RESPONSE THE ASSESSEE FILED AN ADJOURNMENT. NOTICE UNDER SECTION 142(1) OF THE I.T. ACT ALONGWITH QUESTIONNAIRE DATED 23.1.2008 WAS ISSUED. F RESH NOTICE U/.S. 143(2) OF THE I.T. ACT DATED 21.1.2008 WAS ISSUED AND SERVED AND FIXING THE DATE OF HEARING ON 8.2.2008. IN RESPONSE THE ASSESSEE FILED AN ADJOURNMENT APPLICATION AND THE CASE WAS ADJOURNED TO 11.2.2008. THEREAFTER LD. COUNSEL OF THE A SSESSEE ATTENDED THE ASSESSMENT PROCEEDINGS FROM TIME TO TIME AND FILED THE REQUISITE DETAILS. 2.1 AFTER VERIFICATION OF RECORDS AND SUBMISSIONS MADE BY THE ASSESSEE AO FOUND THAT THE ASSESSEE SOCIETY IS REGISTERED AT SERIAL NO. 864/2002 - 03 DATED 2 1.11.2002 BY THE REGISTRAR OF SOCIETIES UTTRANCHAL. THE ASSESSEE - SOCIETY HAS GOT REGISTRATION U/S. 12AA OF THE INCOME TAX ACT 1961 ON 1.4.2006. AS THE ASSESSEE SOCIETY ITA NO. 3105/DEL/2009 (A.Y. 2006 - 07) ACIT VS. UTTRANCHAL STATE COUNCIL FOR SCIENCE & TECHNOLOY 3 HAS REGISTRATION U/S. 12AA WITH EFFECT FROM 1.4.2006 THE RELEVANT YEAR UNDER CONSIDERATION I.E. FY 2005 - 06 IS NOT COVERED AND THE ASSESSSEE CANNOT BE GIVEN EXEMPTION U/S. 11 OF THE I.T. ACT 1961. THE AO ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE ON THE FOLLOWING POINTS: - A. SHOW CAUSE WHY THE GRANTS RECEIVED DURING THE YEAR BE NOT ADDED TO THE INCOME? B. WHY CAPITAL EXPENDITURE BE NOT DISALLOWED IN VIEW OF NON APPLICABILITY OF REGISTRATION U/S. 12AA FOR THE RELEVANT YEAR? 2.2 IN RESPONSE TO THE SAM E ASSESSEE REPLIED ON 20.11.2008 AND THE ASSESSING OFFICER PERUSED THE SAME AND FIND THAT THE CONTENTION OF THE ASSESSEE THAT GRANTS RECEIVED BY THE ASSESSEE SOCIETY DO NOT FALL UNDER THE DEFINITION OF INCOME AS PER SECTION 2(24) IS NOT ACCEPTABLE. AS P ER SECTION 2(24)(IIA) VOLUNTARY CONTRIBUTIONS RECEIVED BY A TRUST CREATED WHOLLY OR PARTLY FOR CHARITABLE OR RELIGIOUS PURPOSES OR BY AN INSTITUTION ESTABLISHED WHOLLY OR PARTLY FOR SUCH PURPOSES FORM PART OF INCOME AS PER THE I.T. ACT 1961. AO FURT HER NOTED THAT IN THE ABSENCE OF BENEFIT OF REGISTRATION U/S. 12AA THE ASSESSEE SOCIETY IS TREATED AS AN AOP AND THE PROVISIONS OF CH. IV INCLUDING PART D I.E. PROFIT AND GAINS OF BUSINESS AND PROFESSION ARE APPLICABLE TO THE ASSESSEE SOCIETY. A L SO AS PER SECTION 56 OF THE I.T. ACT 1961 I.E. INCOME FROM OTHER SOURCES ALL THE RESIDUARY RECEIPTS (REVENUE) OF AN ASSESSEE FORM PART OF ITS INCOME. AO FURTHER NOTED THAT DUE TO NON PRODUCTION OF BOOKS OF ACCOUNTS AND ALSO THE FACT THAT THE ASSESSEE SOC IETY IS NOW ASSESSABLE AS AN AOP THE CAPITAL EXPENDITURE CANNOT BE ALLOWED AND DEPRECIATION ON THE SAME IS NOT PERMISSIBLE AS NO BILLS AND VOUCHERS HAVE BEEN PRODUCED. ACCORDINGLY THE ASSESSING OFFICER ASSESSED THE INCOME AT ITA NO. 3105/DEL/2009 (A.Y. 2006 - 07) ACIT VS. UTTRANCHAL STATE COUNCIL FOR SCIENCE & TECHNOLOY 4 A TOTAL INCOME OF 2 42 58 63 3/ - AND COMPLETED THE ASSESSMENT U/S. 143(3) OF THE INCOME TAX ACT 1961 VIDE ASSESSMENT ORDER DATED 28.11.2008. 3. BEING AGGRIEVED WITH THE AFORESAID ASSESSMENT ORDER ASSESSEE APPEALED BEFORE THE LD. CIT(A) WHO VIDE IMPUGNED ORDER 30.4.2009 HAS PAR TLY ALLOWED THE APPEAL OF THE ASSESSEE. 4 . NOW THE REVENUE IS AGGRIEVED AGAINST THE IMPUGNED ORDER AND FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 5 . AT THE TIME OF HEARING LD. DR RELIED UPON THE ORDER OF THE AO AND STATED THAT LD. CIT(A) WAS ERRED IN HOLDING THAT IN THE YEAR UNDER CONSIDERATION THE ASSES S EE HAS NEITHER RECEIVED ANY VOLUNTARY CONTRIBUTION AS TO ATTRACT PROVISION OF SECTION 2(24)(IIA) OF THE I.T. ACT 1961 AND ALSO STATED THAT THE LD. CIT(A) WAS ERRED IN HOLDING THAT ASSESSEE IS C ERTAINLY NOT CARRYING ON ANY BUSINESS OR PROFESSIONAL ACTIVITY INCOME FROM WHICH COULD BE BROUGHT TO TAX UNDER CHAPTER IVD OF THE I.T. ACT 1961. IN VIEW OF ABOVE HE REQUESTED THE BENCH TO SET ASIDE THE ORDER OF THE LD. CIT(A) AND ORDER OF THE ASSESSIN G OFFICER BE RESTORED. 6. ON THE CONTRARY DURING THE HEARING LD. COUNSEL OF THE ASSESSEE RELIED UPON THE ORDER OF THE LD. CIT(A) AND HAS FILED A SMALL PAPER BOOK CONTAINING PAGES 1 TO 4 . FOR THE SAKE OF CONVENIENCE WE ARE REPRODUCING THE SAME AS UNDER: - 1. THE SOLITARY ISSUE INVOLVED IS WHETHER SPECIFIC TIED UP GRANTS RECEIVED FROM CENTRAL GOVERNMENT/STATE GOVERNMENT OF UTTARANCHAL OF RS. 32 87 780/ - BY AN AUTONOMOUS ORGANIZATION FLOA TED BY GOVERNMENT OF UTTARANCHAL REPRESENTS VOLUNTARY CONTRIBUTIONS U/S 2(24)(IIA) OF THE ACT SO AS TO BE TAXED AS INCOME OF THE ASSESSEE SOCIETY OR AS BUSINESS INCOME OF ASSESSEE SOCIETY. ITA NO. 3105/DEL/2009 (A.Y. 2006 - 07) ACIT VS. UTTRANCHAL STATE COUNCIL FOR SCIENCE & TECHNOLOY 5 2 THE ISSUE IS NO LONGER RES - INTEGRA AND STANDS DECIDED BY FOLLO WING JUDGMENTS: 1 205 TAXMANN 373 DIT VS. VS. SOCIETY FOR DEVELOPMENT ALTERNATIVES (DEL) PAGE S 219 - 222 OF PAPER BOOK REGD. U/S. 12A A) HELD AT PAGE 221 THAT GRANTS FOR SPECIFIED PURPOSES (TIED UP GRANTS) FROM GOVERNMENT TO BE SPENT AS PER TERM AND CON DITIONS ARE NOT VOLUNTARY CONTRIBUTIONS AS ASSESSEE IS NOT FREE TO USE THE MONEY AS PER ITS WILL. B) A VOLUNTARY CONTRIBUTION IS ONE WHEN APPELLANT IS FREE TO USE THE MONEY AS PER ITS WILL AND NEITHER HAS TO BE RENDER ACCOUNT TO BE THE DONOR NOR THE S AME IS TO BE MONITORED BY DONOR. C) THE ASSESSEE ACTS AS A CUSTODIAN D) FOLLOWED - 149 ITR 470 (RAJ) SUKHDEO CHARITY VS. CIT 2 ITA NO. 75 OF 2011 CIT VS. PUNJAB STATE E - GOVERNANCE SOCIETY (P&H) PAGE S 223 - 225 OF REGD. U/S. 12A OF THE ACT. A) HELD AT PAGE 224 THAT SPECIFIED TIED UP GRANTS ARE NEITHER VOLUNTARY ITA NO. 3105/DEL/2009 (A.Y. 2006 - 07) ACIT VS. UTTRANCHAL STATE COUNCIL FOR SCIENCE & TECHNOLOY 6 PAPER BOK CONTRIBUTIONS AND NOR LIABLE TO BE TREATED AS INCOME B) FOLLOWED - ORDER DATED 12.12.2008 OF ITA NO. 190 OF 2008 (P&H) CIT VS. M/S PUNJAB STATE SPORTS COUNCIL - ORDER DATED 31.7.2008 ITA NO. 666 OF 2008 (P&H) CIT VS. PUNJAB ENERGY DEVELOPMENT AGENCY - 284 ITR 582 (KAR) CIT VS. KARNATAKA URBAN INFRASTRUCTURE DEVELOPMENT AND FINANCE CORPORATION 3 284 ITR 582 CIT VS. KAMATAKA URBA N INFRASTRUCTURE DEVELOPMENT AND FINANCE CORPN. (KAR) P G. 226 - 227 OF P B NOT REGD. U/S. 12A A) HELD AT PAGE 227 THAT INTEREST ACCRUED ON DEPOSITS CANNOT BE TREATED AS INCOME AS THE SAME IS EARNED ON MONEY GIVEN BY GOVERNMENT OF INDIA FOR PURPOSE OF IMPLEMENTATION OF MAJOR CITY SCHEME _ B) HERE THE MONIES RECEIVED FROM GOVERNMENT WERE ITA NO. 3105/DEL/2009 (A.Y. 2006 - 07) ACIT VS. UTTRANCHAL STATE COUNCIL FOR SCIENCE & TECHNOLOY 7 ACCEPTED BY THE AO AS NOT INCOME OF ASSESSEE. 4 205 TAXMAN 378 BIHAR AGRICULTURAL PRODUCE MARKETING BOARD VS. CIT PATNA PG. 228 - 233 OF PB REG. U/S. 12A OF THE ACT. HELD AT PAGE 233 THAT BOARDS FUNDS BEING CONTRIBUTION FOR SPECIFIC PURPOSES (AS ASSESSEE WAS NOT FREE TO USE IN ANY MANNER AS IT LIKED) ARE NOT INCOME FOR PROFITS AND GAINS OR VOLUNTARY CONTRIBUTIONS U/S 2(24) OF THE ACT. B) THE FUNDS SINCE CANNOT BE USED FOR COMMERCIAL ACTIVITIES OR TRADE AND BUSINESS ON PERMIT ANY PROFIT MOTIVE AND FUNCTIONS ARE SPECIFIED AND STATUTORY THEREFORE IT IS NOT A REVENUE RECEIPT. 5 288 ITR 106 CIT VS. U.P. UPBHOKTA SAHKARI SANGH LTD. (ALL.) PG. 234 - 235 OF PB NOT REGD. U/S. 12A OF THE ACT. HELD AT PAGE 235 THAT AMOUNTS RECEIVED FOR SPECIFIC PURPOSES DO NOT PERTAIN OF THE NATURE OF INCME AND ITA NO. 3105/DEL/2009 (A.Y. 2006 - 07) ACIT VS. UTTRANCHAL STATE COUNCIL FOR SCIENCE & TECHNOLOY 8 EVEN IF THERE IS ANY INCOME IT IS NOT LIABLE FOR TAXATION AS THERE WA S DIVERSION OF WAVE BY OVERRIDING TITLE. 6 149 ITR 470 SUKHDEO CHARITY ESTATE VS. CIT RAJ. PG. 236 - 252 NOT REGISTERED U/S. 12A (N.A.) IN THE YEAR A) PROVISION OF SECTION 12A OF THE ACT IN 1922 ACT (PAGE 240) IN 1961 ACT (BEFORE AMENDMENT (PAGES 240 - 241) IN 1961 (AFTER AMENDMENT)(PAG E 241) B) HELD AT PAGES 242 - 243 A CAPITAL AMOUNT IN THE FORM OF MONEY AND RECEIVED BY A CHARITABLE TRUST FOR SPECIFIC PURPOSES MAY BE SAID TO BE CORPUS OR REMAINED AS CAPITAL IS A FUND IN CONTRAST TO INCOME WHICH IS TO BE EXAMINED HAVING REGARD TO MOTIVE INTENTION AND NATURE OF VOLUNTARY CONTRIBUTION. C) NOTED AT PAGES 245 - 246 THE JUDGMENT OF ITA NO. 3105/DEL/2009 (A.Y. 2006 - 07) ACIT VS. UTTRANCHAL STATE COUNCIL FOR SCIENCE & TECHNOLOY 9 HON'BLE SUPREME COURT IN THE CASE OF CIT VS. TOLLYGUNGE CLUB LTD. REPORTED IN 107 ITR 7.76 (SC) THAT A REQUISITE OF A TRUST IS ONLY THAT THERE SHOULD BE PURPOSE INDEPENDENT OF DONE TO WHICH THE SUBJECT MATTER OF GIFT IS REQUIRED TO BE APPLIED AND AN OBLIGATIONAS DONE TO SATISFY THOSE PURPOSES. ' D) .. HELD AT R PAGE; 248 THAT ACT NOWHERE PROVIDES' THAT WHATEVER IS RECEIVED BY A PERSON OR A TRUST MUST BE REGARDED AS INCOME LIABLE TO TAX. IN ALL CASES IN WHICH A RECEIPT IS SOUGHT TO BE TAXED AS INCOME BURDEN LIES UPTO THE DEPARTMENT TO PROV E IT IS WITHIN TAXING PROVISIONS. HOWEVER IF THE RECEIPT IS IN ITA NO. 3105/DEL/2009 (A.Y. 2006 - 07) ACIT VS. UTTRANCHAL STATE COUNCIL FOR SCIENCE & TECHNOLOY 10 NATURE OF INCOME BURDEN OF PROVING STATE IT IS NOT TAXABLE BECAUSE - IT FALLS WITHIN AN EXEMPTION LIES UPON THE ASSESSEE. E) HELD AT PAGE 251 THAT DONATION WAS FOR SPECIFIC PURPOSES DID NOT REPRESENT INCOME UNDER SECTION 12(1) SO AS TO ATTRACT 12(2) OF THE ACT 7 71 ITD 152 NIRMAL AGRICULTURAL SOCIETY VS. ITO HYD. PG. 279 - 284 OF PB NOT REGD. U/S. 12A OF THE ACT. HELD AT PAGE 283 THAT GRANTS ARE FROM SPECIFIC PURPOSES AND THUS ARE NOT VOLUNTARY CONTRIBUTION AS I THEY ARE NOT GREEDY AVAILABLE TO ASSESSEE WITHOUT ANY STIPULATION WHICH ASSESSEE COULD UTILIZE TOWARDS ITS OBJECTIVES ACCORDING TO OWN DISCRETION. TIED UP GRANTS FOR SPECIFIC PURPOSES ONLY MEANS THAT ASSESSEE ACTS AS A TRUSTEE OF A FUND 8 90 ITD 493 SOCIETY FOR INTEGRATED DEVELOPMENT IN (HYD) PAGE S 253 - 278 NOT ENTITLED TO EXEMPTIO A) FOLLOWED - NIRMAL AGRICULTURAL SOCIETY'S (CASE) ITA NO. 3105/DEL/2009 (A.Y. 2006 - 07) ACIT VS. UTTRANCHAL STATE COUNCIL FOR SCIENCE & TECHNOLOY 11 URBAN AND RURAL AREAS VS. DCIT OF PAPER BOOK N U/S. 11 OF THE ACT. (PAGES 274 - 275) (NO APPEAL FILED (PAGE 76) - SUKHDEO CHARITY ESTATE (SUPRA) PAGES 275 276) B) HELD AT PAGE 277 THE PRINCIPLES OF CAPITAL VERSUS REVENUE DOCTRINE OF OVERRIDING TITLE CANNOT BE IGNORED DESPITE 2(24) (IIA) OF THE ACT. C) REFER TO COMMENTARY OF CHATURVEY AND PITHISARIA (PAGE 277 - 278) TO CONCLUDE THAT CORPUS DONATION ARE NOT INCOME. 9 ITA NO. 1430 & 1431 OF 2013 DATED 10.1.2014 ASSTT. DIT VS. NICE FOUNDATION (HYD) NOT REGISTERED U/S. 12A OF THE ACT HELD AT PAGE 348 THAT THE CO - ORDINATE BENCH FOLLOWING ANOTHER DECISION OF THE SAME BENCH IN THE CASE OF NIRMAL AGRICULTURAL SOCIETY (71 ITD 493) HELD THAT TIED UP GRANTS EVEN IF REGISTRATION U/S 12A IS NOT AVAILABL E CANNOT BE TAXED AS INCOME. ITA NO. 3105/DEL/2009 (A.Y. 2006 - 07) ACIT VS. UTTRANCHAL STATE COUNCIL FOR SCIENCE & TECHNOLOY 12 10 . 32 ITR (TRIB) 152 INDIAN SOCIETY OF ANAESTHESIOLOGI T ITO (URO) CHENNA I 306 TO 309 OF PB REG D. U/S. 12A OF THE ACT HELD THAT FUNDS RECEIVED WERE ESSENTIALLY PART OF CAPITAL FUND AND HAD TO BE CONSIDERED AS CORPUS OF THE ASSESSEE SOCIETY AND NOT AS VOLUNTARY CONTRIBUTIONS IN NATURE OF INCOME AS PROVIDED UNDER SECTION 12 11 159 TTJ 236 JB EDUCATIONAL SOCIETY VS. ASSTT. CIT HYD. 310 TO 348 OF PB NOT REG D. U/S. 12A OF THE ACT. VOLUNTARY CONTRIBUTIONS IN THE NATURE OF TIED UP GRANT RECEIVED BY THE ASSESSEE CANNOT BE BROUGHT TO TAX IF IT IS USED FOR SPECIFIC PURPOSE FOR WHICH IT HAS BEEN GIVEN. 3 APPLYING THE FOREGOING IT IS SUBMITTED THAT IT BE HELD THAT GRANTS ARE NOT VOLUNTARY CONTRIBUTIONS U/S 2(24)(IIA) OF THE ACT. IT IS SUBMITTED THAT ASSESSEE HAS BEEN REGISTERED U/S 12A OF THE ACT FROM ASSESSMENT YEAR 2007 - 08 AND INCOME IS EXEMPT FROM ASSESSMENT YEAR 2007 - 08. IT HAS BEEN CONSTITUTED BY GOVERNMENT OF UTTARANCHAL FO R LIMITED PURPOSE OF RESEARCH AND NOT TO CARRY ON ANY PROFITS AND GAINS. THERE IS NO SOURCE OF INCO M E OTHER THAN GRANTS AND ALL EXPENDITURE INCURRED ARE FROM SPECIFIC GRANTS GIVEN BY CENTRAL/STATE GOVERNMENT. THUS SUCH GRANTS ARE NOT REVENUE RECEIPTS TAXABLE AS INCOME. ITA NO. 3105/DEL/2009 (A.Y. 2006 - 07) ACIT VS. UTTRANCHAL STATE COUNCIL FOR SCIENCE & TECHNOLOY 13 7 . WE HAVE HEARD THE BOTH PARTIES AND PERUSED THE RELEVANT RECORD AVAILABLE WITH US SPECIALLY THE IMPUGNED ORDER S PASSED BY THE REVENUE AUTHORITIES AND THE SUBMISSIONS AS AFORESAID OF THE LD. COUNSEL OF THE ASSESSEE AND THE CASE LAW S RELIED UPON BY HIM. WE FIND CONSIDERABLE COGENCY IN THE CONCLUSION DRAWN BY THE L D. FIRST APPELLATE AUTHORITY THAT ALL GRANTS FOR CAPITAL PURPOSE AS WELL AS REVENUE PURPOSES ARE BEING HELD AS NON - TAXABLE IN THE CASE OF THE ASSESSEE AS THESE HAVE EITHE R BEEN SPENT ON THE EARMARKED PROJECTS OR ARE PERMITTED TO BE CARRIED FORWARD TO BE SPENT ON THE SAME PROJECTS IN FUTURE. THE ASSESSEE CANNOT IN ANY MANNER USE ANY PART OF SUCH GRANTS ACCORDING TO ITS OWN DISCRETION NOR CAN IT DEPLOY ANY PART THERE FOR G ENERATION OF ANY INCOME OTHER THAN INTEREST INCOME. THIS IS BECAUSE THE GRANTS ONCE RECEIVED HAVE TO BE NECESSARILY DEPOSITED IN SOME BANK ACCOUNT WHEREFROM THE DEPOSITS ARE BOUND TO FETCH INTEREST INCOME. THERE IS NO SCOPE FOR GENERATION OF INCOME OF A NY OTHER NATURE IN THE FACTS AND CIRCUMSTANCES OF THE ASSESSEE. WE FIND THAT THE PRESENT ISSUE IN DISPUTE IS COVERED IN FAVOR OF THE ASSESSEE BY ONE OF THE CASES CITED BY THE LD. COUNSEL OF THE ASSESSEE I.E. IN THE CASE OF NIRMAL AGRICULTURAL SOCIETY V S. ITO 71 ITD 152 WHEREIN IT WAS HELD THAT GRANTS ARE FROM SPECIFIC PURPOSES AND THUS ARE NOT VOLUNTARY CONTRIBUTION AS THEY ARE NOT GREEDY AVAILABLE TO ASSESSEE WITHOUT ANY STIPULATION WHICH ASSESSEE COULD UTILIZE TOWARDS ITS OBJECTIVES ACCORDING T O OWN DISCRETION. TIED UP GRANTS FOR SPECIFIC PURPOSES ONLY MEANS THAT ASSESSEE ACTS AS A TRUSTEE OF A FUND . FROM THE ABOVE IT IS CRYSTAL CLEAR THAT GRANTS ARE NOT VOLUNTARY CONTRIBUTIONS U/S. 2(24)(IIA) OF THE ACT. 8 . KEEPING IN VIEW OF THE AFORESAID FACTS AND CIRCUMSTANCES OF THE CASE AS EXPLAINED ABOVE WE ARE OF THE VIEW THAT THE LD. FIRST ITA NO. 3105/DEL/2009 (A.Y. 2006 - 07) ACIT VS. UTTRANCHAL STATE COUNCIL FOR SCIENCE & TECHNOLOY 14 APPELLATE AUTHORITY HAS PASSED A WELL REASONED ORDER WHICH DOES NOT NEED ANY INTERFERE ON OUR PART HENCE WE UPHOLD THE SAME. 9 . IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE O PEN C OURT ON 31 / 0 7 /20 1 5 . SD/ - SD/ - [ N.K. SAINI ] [ H.S. SIDHU ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 31 / 0 7 /201 5 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR ITAT TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT DELHI BENCHES