Natrip Implementation Society, New Delhi V. ADIT, New Delhi

ITA 3669/DEL/2012

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7781 (ITAT-DELHI)
• Duration Of Justice: 6 year(s) 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 12-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN JAIN
• Assessee Lawyers: SAUBHAGYA AGARWAL
• Keywords: Reasonable cause; Set aside
• Section: 12A; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCE E, NEW DELHI BEFORE SHRI R.K.PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.3669 /DEL./2012 (ASSESSMENT YEAR : 2009-10) NATRIP IMPLEMENTATION SOCIETY VS. AD IT NBCC PLACE, SOUTH TOWER INV. CIRCLE II 3 RD FLOOR, BISHAM PITAMAH MARG, LODHI ROAD NEW DELHI NEW DELHI PAN : AAATN7662F APPELLANT RESPONDENT ASSESSEE BY : SH. SAUBHAGYA AGARWAL, ADV. REVENUE BY : MS. SUMAN JAIN, CA DATE OF HEARING : 04 .04.2019 DATE OF ORDER : 18.04.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THE APPELLANT NATRIP IMPLEMENTATION SOCIETY (HEREI NAFTER REFERRED TO AS 'THE ASSESSEE') BY FILING THE AFORES AID APPEAL, SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 29/05/2012 PASSED BY LD. COMMISSIONER OF INCOME TAX(APPEALS)-XXI, NEW DELHI QUA THE ASSESSMENT YEAR 2009-10 ON THE GROUNDS INTER ALIA THAT : ITA NO.3669 /DEL/2012 2 1. THAT THE ORDER PASSED BY THE LD. A.O. AND PARTLY CONFIRMED BY THE CIT(A), NEW DELHI IS NOT ONLY BAD IN LAW BUT ALSO AGAINST THE FACTS OF THE CASE. 2. THAT THE LD. CIT(A) IS ERRED UNDER THE LAW WHILE HOLDING THE RECEIPT OF ICAT AS INCOME OF THE SOCIETY U/S 12 OF THE ACT PRIMARILY IN VIEW OF FOLLOWING FACTS :- A) THE APPELLANT IS TRUSTEE OF GOVT. OF INDIA FOR AND ON BEHALF OF DEPTT. OF HEAVY INDUSTRY. B) THE APPELLANT BEING AGENT OF GOVT. OF INDIA, CONSEQUENTLY SHOULD BE TAXED IN THE SAME MANNER AS IF PRINCIPLE. 3. ANY OTHER GROUNDS OF APPEAL MAY BE ADDED/AMENDED/DELETED AT THE TIME OF HEARING OF APPEAL THEREFORE, IT IS PRAYED AS UNDER :- 1. THAT THE APPELLANT SOCIETY MAY PLEASE BE TREATED AS TRUSTEE OF GOVT. OF INDIA FOR AND ON BEHALF OF DEPTT. OF HEAVY INDUSTRY 2. THAT THE RECEIPT OF ICAT SHOULD NOT BE TREATED AS INCOME OF THE APPELLANT AT ALL. 2. BRIEFLY STATED THAT FACTS NECESSARY FOR ADJ UDICATION OF THE CONTROVERSY AT HAND ARE : THE ASSESSEE SOCIETY BEI NG REGISTERED UNDER SOCIETIES REGISTRATION ACT, 1860 HAS ALSO BEE N REGISTERED U/S ITA NO.3669 /DEL/2012 3 12A OF THE ACT AND IS NOTIFIED U/S 80G(5)(VI) OF TH E INCOME TAX, ACT, 1961 FOR THE PERIOD 01.04.2007 TO 31.03.2010. ASSESSEE SOCIETY FILED RETURN OF INCOME DECLARING NIL INCOME ALONG WITH AUDIT REPORT. ASSESSEES SOCIETY IS DRAWING TWO TYP ES OF RECEIPTS; ONE FROM NATRIP, WHICH IS NOT INCOME OF THE ASSES SEE SOCIETY WHICH IT HOLDS IN ON BEHALF OF THE GOVERNMENT; T WO - RECEIPTS FROM TESTING CHARGES OF ICAT / MANESAR WHICH IS AL SO SHOWN IN THE CONSOLIDATED BALANCE SHEET. 3. AO INVOKED THE PROVISIONS CONTAINED U/S 2(15) OF THE ACT AND NOTICED FROM THE COMPUTATION CHART THAT RS. 5,5 5,000/- IS SPENT ON INVESTMENT IN FDR AND SHOWN AS APPLICATION OF INCOME FOR WHICH NO FORM 10 IS SUBMITTED. DECLINING THE CO NTENTION RAISED BY THE ASSESSEE AO PROCEEDED TO CONCLUDE THA T RECEIPT OF TESTING CHARGES OF ICAT/ MANESAR DOES NOT SEEM TO B E HELD IN THE CAPACITY OF TRUSTEE OF GOVERNMENT OF INDIA AND THAT THE AMOUNT SPENT ON INVESTMENT IN FDR CANNOT BE CONSIDE RED AS APPLICATION AS THE AMOUNT CAN BE ACCUMULATED ONLY T O THE EXTENT OF 85% OF THE TOTAL RECEIPT. SO THE AO HAS DISALLOW ED THE AMOUNT OF RS. 5,55,000/- CLAIMED AS INVESTMENT IN FDR OUT OF THE RECEIPT OF ICAT AND ASSESSED THE INCOME OF THE ASSESSEE AT RS. 1,96,48,891/-. ITA NO.3669 /DEL/2012 4 4. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A ) WHO HAS PARTLY ALLOWED THE APPEAL. FEELING AGGRIEVED THE A SSESSEE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PR ESENT APPEAL. 5. ASSESSEE BY MOVING AN APPLICATION SOUGHT TO RAIS E ADDITIONAL GROUND THAT THE SAME ARE LEGAL GROUND WHICH ARE NEC ESSARY TO DECIDE THE CONTROVERSY AT HAND. LD. DR FOR THE REVE NUE OPPOSED THE APPLICATION ON THE GROUND THAT AT THIS STAGE AP PLICATION IS NOT MAINTAINABLE. 6. KEEPING IN VIEW THE SETTLED PRINCIPLE OF LAW THA T LEGAL GROUND CAN BE RAISED BY EITHER OF THE PARTIES TO TH E APPEAL AT ANY STAGE OF THE PROCEEDINGS, APPLICATION IS ALLOWED, W HICH IS OTHERWISE NECESSARY FOR ADJUDICATION OF THE CONTROVERSY AT HA ND. ADDITIONAL GROUNDS RAISED ARE AS UNDER :- 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) IS ERRED UNDER THE LAW WHILE HOLDING THE RECEIPTS OF ICAT AND OTHER FUNCTIONAL UNITS AS INCOME OF THE APPELLANT SOCIETY U/S 2(15) WHEREAS THE OVERRIDING TITL OVER SUCH RECEIPTS BELONG TO DEPARTMENT OF HEAVY INDUSTRY AND PUBLIC ENTERPRISES, GOVERNMENT OF INDIA. 2. THAT THE CIT(A) IS ERRED UNDER LAW WHILE NOT TAKING ON RECORDS FORM NO. 10 AS FILED BY THE APPELLANT DURING APPELLATE PROCEEDINGS INSPITE OF T HE ITA NO.3669 /DEL/2012 5 APPELLANT BEING PREVENTED BY REASONABLE CAUSE IN NO T FURNISHING THE SAME WHILE FILING ITR U/S 139(1), CONSEQUENTLY DENIED THE BENEFIT OF FUNDS ACCUMULATED BY THE APPELLANT AS PER SECTION 11(2) O F THE ACT. 7. UNDISPUTEDLY ASSESSEE SOCIETY, NATIONAL AUT OMOTIVE TESTING AND R & D INFRASTRUCTURE PROJECT (NATRIP) HAS BEEN CONSTITUTED WITH THE INVESTMENT JOINTLY FUNDED BY GOVERNMENT OF INDIA AND INDIAN AUTOMOTIVE INDUSTRY TO CARRY OUT THE AIMS AN D OBJECTIVES ENSHRINED IN THE MEMORANDUM AVAILABLE AT PAGE 43 TO 44 OF THE PAPER BOOK. IT IS ALSO NOT IN DISPUTE THAT THE ASSE SSEE SOCIETY IS MERELY ACTING AS A TRUSTEE OF FUNDS OF GOVERNMENT OF INDIA. THE AIMS AND OBJECTIVES OF THE SOCIETY BEING CHARITABLE HAVE ALSO NOT BEEN DISPUTED BY THE REVENUE. 8. UNDISPUTEDLY TOTAL ESTIMATED PROJECT COST OF NAT RIP ESTABLISHED BY THE CABINET COMMITTEE ON ECONOMIC AF FAIRS WAS AT RS. 1718 CRORE, DETAILED AS UNDER :- A. PLAN SUPPORT BY THE GOVERNMENT BY WAY OF GRANT RS. 817 CRORE BY WAY OF LOAN RS. 273 CRORE B. CONTRIBUTION FROM AUTOMOTIVE CESS COLLECTED FROM THE AUTO IND. RS. 510 CRORE C. USER CHARGES TO BE PAID BY AUTO INDUSTRY RS. 118 CRORE TOTAL PROJECT COST (A+B+C) 1718 CRORE ITA NO.3669 /DEL/2012 6 9. AO AS WELL AS LD. CIT(A) HAVE DIVIDED THE RECEIP T OF NATRIP UNDER TWO HEADS INTER ALIA THAT :- (I) FIRST TYPE OF RECEIPT IS FROM NATRIP, WHICH I S NOT THE INCOME OF NATRIP IMPLEMENTATION SOCIETY AND SOCIETY IS HOL DING THE INCOME ON BEHALF OF THE GOVERNMENT. (II) SECOND TYPE OF RECEIPT COMES FROM TESTING CHAR GES OF ICAT / MANESAR, WHICH IS ALSO SHOWN IN THE CONSOLIDATED BA LANCE SHEET. 10. SO FAR AS THE CASE OF RECEIPT OF ASSESSEE SOCI ETY FROM NETRIP I.E. RS. 817 CRORE + 273 CRORE + 510 CRORE R ECEIVED FROM PLAN SUPPORT BY GOVERNMENT OF INDIA AND CONTRIBUTIO N FROM AUTOMOTIVE CESS COLLECTED FROM AUTOMOTIVE INDUSTRY IS CONCERNED THE AO/ LD. CIT(A) HAVE HELD THAT THE SAME TO BE NO T TAXABLE FOR THE PURPOSE OF INCOME TAX. HOWEVER, AO HAS DISPUTED THE RECEIPT OF RS. 118 CRORE BY THE ASSESSEE SOCIETY FROM TESTI NG CHARGES OF ICAT MANESAR AND HAS ALSO DISALLOWED THE AMOUNT OF RS. 5,55,000/- BEING INVESTMENT IN FDRS OUT OF RECEIPT OF ICAT ON THE GROUND THAT THE AMOUNT CAN BE ACCUMULATED ONLY WHEN THE APPLICATION FALLS SHORT OF 85% OF THE TOTAL RECEIPT S. 11. WHEN WE EXAMINE COMPOSITION OF THE ASSESSEE SOC IETY WHICH IS A MERE TRUSTEE OF FUNDS OF GOVERNMENT OF I NDIA, MINISTRY OF HEAVY INDUSTRIES AND PUBLIC ENTERPRISES, WHOSE A IMS AND ITA NO.3669 /DEL/2012 7 OBJECTIVES ARE NOT IN DISPUTE, ITS FUNDS ARE TO BE UTILIZED / SPENT IN ACCORDANCE WITH OBJECTIVES FORMULATED BY THE GOVER NMENT OF INDIA WITHIN SPECIFIED TIME. UNDISPUTEDLY ASSESSEE SOCIETY HAS RECEIVED AN AMOUNT OF RS. 118 CRORE AS USER CHARGES PAID BY THE AUTO INDUSTRY. IT IS ALSO NOT IN DISPUTE THAT THE A CTIVITY OF ICAT MANESAR ARE PRIMARILY CONFINED TO PRESERVATION OF ENVIRONMENT, WHICH IS CERTAINLY A CHARITABLE PURPO SE AS DEFINED U/S 2(15) OF THE ACT. 12. WHEN IT IS NOT CASE OF THE ASSESSEE THAT THE US ER CHARGES PAID BY THE AUTO INDUSTRY HAVE BEEN MIS-UTILISED TO CARR Y OUT ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINE SS THE SAME CANNOT BE BROUGHT TO TAX. PARA IV MEMORANDUM OF SOC IETY AVAILABLE AT PAGE 43 TO 45 OF PAPER BOOK GOES TO PROVE THAT FOR ALL INTENTS AND PURPOSES THE ENTIRE FUNDS / RECEIPTS AVAILABLE WITH THE ASSESSEE SOCIETY ARE TO BE UTILIZED TO ACHIEVE AND PROMOTE T HE AIMS AND OBJECTIVES OF THE SOCIETY, WHICH ARE EXTRACTED FOR READY PERUSAL AS UNDER :- IV. (A) ALL THE INCOMES, EARNINGS, MOVABLE OR IMMOVABLE PROPERTIES OF THE SOCIETY SHALL BE SOLELY UTILIZED AND APPLIED TOWARDS THE PROMOTION OF ITS A IMS AND OBJECTS ONLY AS SET FORTH IN THE MEMORANDUM OF THE SOCIETY AND NO PROFIT THEREOF SHALL BE PAID OR TRANSFERRED, DIRECTLY OR INDIRECTLY, BY WAY OF ITA NO.3669 /DEL/2012 8 DIVIDENDS, BONUS, PROFITS OR IN ANY MANNER WHATSOEVER TO THE PRESENT OR THE PAST MEMBERS OF TH E SOCIETY OR TO ANY PERSON CLAIMING THROUGH ANY ONE O R MORE OF THE PRESENT OR THE PAST MEMBERS. (B) NO MEMBER OF THE SOCIETY SHALL HAVE ANY PERSONA L CLAIM ON ANY MOVABLE OR IMMOVABLE PROPERTIES OF THE SOCIETY OR MAKE ANY PROFITS, WHATSOEVER, OR CLAIM A NY REMUNERATION BY VIRTUE OF THIS MEMBERSHIP. (C) THE SOCIETY SHALL ABIDE BY GOVERNMENTAL DIRECTIONS EXPRESSLY ISSUED TO IT. 13. THE FINDINGS OF THE ASSESSING OFFICER THAT THE RECEIPT OF TESTING CHARGES OF ICAT MANESAR BY THE ASSESSEE SOC IETY DOES NOT SEEM TO BE HELD IN THE CAPACITY OF TRUSTEE OF G OVERNMENT OF INDIA ARE MERELY BASED UPON CONJECTURES AND SURMIS ES WITHOUT ANY COGENT EVIDENCE ON RECORD. BECAUSE AIMS AND OBJ ECTS OF THE ASSESSEE SOCIETY ARE CATEGORIC ENOUGH THAT ALL INC OMES AND RECEIPTS SHALL BE SOLELY UTILIZED AND APPLIED TOWARDS THE PR OMOTION OF ITS AIMS AND OBJECTS WHICH ARE CERTAINLY OF CHARITABLE NATURE AND NO MEMBER OF THE SOCIETY SHALL HAVE ANY PERSONAL CLAIM ON THE MOVABLE, IMMOVABLE PROPERTY OF THE SOCIETY OR MAKE ANY PROFIT WHATSOEVER OR CLAIM ANY REMUNERATION BY VIRTUE OF I TS MEMBERSHIP. SO, WHEN THE ENTIRE RECEIPTS IS BEING USED TO CARRY OUT AND PROMOTE THE AIMS AND OBJECTS OF THE ASSESSEE SOCIETIES ITS RECEIPTS OF TESTING ITA NO.3669 /DEL/2012 9 CHARGES OF ICAT MANESAR ARE CERTAINLY HELD BY THE A SSESSEE SOCIETY IN THE CAPACITY OF A TRUSTEE OF GOVERNMENT OF INDIA. 14. THE LD. AR FOR THE ASSESSEE BROUGHT TO OUR NOTI CE BROAD FUNCTIONAL MODALITIES, OF THE ASSESSEES SOCIETY AVAILABLE AT PAGE 88 TO 89 OF THE PAPER BOOK TO EXAMINE AS TO HOW THE ASSESSEE SOCIETY FUNCTIONS, WHICH ARE EXTRACTED FOR READY PE RUSAL AS UNDER :- 5. DEPARTMENT OF HEAVY INDUSTRY WILL RELEASE FUNDS IN ADVANCE ON QUARTERLY BASIS TO NATIS AND T HE FUNDS WILL BE SPENT IN FURTHERANCE OF THE BESENT OBJECTIVES IN TERMS OF RULES AND REGULATIONS TO BE FRAMED BY NATIS. NATIS WILL FURNISH UTILIZATION CERTIFICATES TO THE GOVERNMENT AT REGULAR PERIODICI TY THE FUNDS RELEASED TO NATIS FROM PLAN AND CESS ALLOCATIONS WILL FLOW IN A MERGED FORM WITH APPROPR IATE PERCENTAGE MARKED AS LOAN CORRESPONDING TO THE EL RECOMMENDATIONS. 6. NATIS WILL MAINTAIN DETAILED ACCOUNTS OF THE FUNDS RECEIVED AND SPENT AND THE ACCOUNTS WILL BE SUBJECT TO AUDIT BY STATUTORY AUDITORS AS WELL AS BY COMPTROLLER AND AUDITOR GENERAL OF INDIA. 7. NATIS WILL BE EMPOWERED TO TAKE ALL DECISIONS IN THE CONTEXT OF PROJECT IMPLEMENTATION INCLUDING FINALIZATION OF CONTRACTS, AWARD OF TENDERS ENGAGEM ENT OF PERSONNEL, FIXING THEIR REMUNERATION PACKAGE / .SITTING FEE ETC. NO REFERENCE WILL BE NEEDED TO THE GOVERNMENT IN DISCHARGE . THESE OBLIGATORY FUNCTIO NS OF NATIS. 15. AFORESAID FUNCTIONAL MODALITIES LAID DOWN BY GO VERNMENT OF INDIA, MINISTRY OF HEAVY INDUSTRY AND PUBLIC ENT ERPRISES GO TO PROVE THAT ASSESSEE SOCIETY WILL WORK AS AUTONOMOU S ORGANIZATION ITA NO.3669 /DEL/2012 10 UNDER DEPARTMENT OF HEAVY INDUSTRY, THE GOVERNMENT OF INDIA. IT WILL MAINTAIN DETAILED ACCOUNTS OF FUNDS RECEIPT, W HICH WILL BE SUBJECT TO AUDIT BY STATUTORY AUDITORS AS WELL AS B Y COMPTROLLER AND AUDITOR GENERAL OF INDIA (CAG) AND ALL THE ACCOUNTS WILL BE LAID ON THE TABLE OF BOTH HOUSES OF PARLIAMENT ON ANNUAL BASIS. 16. SO, WE ARE OF THE CONSIDERED VIEW IN THESE CIRC UMSTANCES ALL THE FUNDS RECEIVED BY ASSESSEE SOCIETY AS PER ITS M EMORANDUM ARE TO BE CONSIDERED AS A FUND HELD IN THE CAPACITY OF TRUSTEE OF GOVERNMENT OF INDIA. MOREOVER NO EVIDENCE HAS BEEN BROUGHT ON RECORD BY THE AO TO PROVE OTHERWISE BUT HAS MERELY PROCEEDED ON THE BASIS OF ASSUMPTIONS. AT THE SAME TIME LD. CIT( A) HAS NOT EXAMINED THE ISSUE IN ENTIRETY RATHER PASSED A CRYP TIC ORDER. SO, WE ARE OF THE CONSIDERED VIEW THAT FUNDS ON ACCOUNT OF RECEIPTS OF TESTING CHARGES OF ICAT MANESAR BY THE ASSESSEE SOC IETY ARE HELD IN THE CAPACITY OF TRUSTEE OF GOVERNMENT OF IN DIA. 17. SO FAR AS THE QUESTION OF DISALLOWANCE OF AMOU NT OF RS. 5,55,000/- CLAIMED AS INVESTMENT IN FDRS AS APPLICA TION FOR ASSESSEE SOCIETY IS CONCERNED, THE ASSESSEE HAS DUL Y FILED FORM NO. 10 DURING THE APPELLATE PROCEEDINGS BUT HAS NOT BEE N TAKEN INTO ACCOUNT BY LD. CIT(A) BUT DENIED THE BENEFITS OF FU NDS ACCUMULATED BY THE ASSESSEE AS PER SECTION 11(2) OF THE ACT. ITA NO.3669 /DEL/2012 11 18. HONBLE HIGH COURT OF KARNATAKA IN CASE CITED AS COMMISSIONER OF INCOME-TAX VS. KARNATAKA URBAN INFRASTRUCTURE DEVELOPMENT & FINANCE CORPN. HAS DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE IN THE ID ENTICAL SET OF FACTS THAT THE AMOUNT RECEIVED BY THE ASSESSEE FROM THE G OVERNMENT OF INDIA WAS DEPOSITED IN THE FDRS DURING THE UNUTILIZ ED PERIOD AND CONFIRMED THE DECISION RENDERED BY TRIBUNAL THAT TH E ASSESSEE IS NOTHING BUT TRUSTEE OF THE FUNDS ENTRUSTED TO CARRY OUT THE OBJECTS OF THE GOVERNMENT WHILE IMPLEMENTING THE SCHEME. OP ERATIVE PART OF THE DECISION RENDERED BY HONBLE HIGH COURT IS E XTRACTED AS UNDER :- 4. THE MATERIAL ON RECORD SHOWS THAT THE VERY PUR POSE OF CONSTITUTION OF THE ASSESSEE WAS TO ACT AS A NODAL AGENCY FOR IMPLEMENTATION OF MEGA-CITY SCHEME WORKED OUT BY TH E PLANNING COMMISSION. BOTH THE CENTRAL AND THE STATE GOVERNMENTS ARE EXPECTED TO PROVIDE REQUISITE FINAN CES FOR IMPLEMENTATION OF THE SAID PROJECT. THE FUNDS FROM THE CENTRAL AND STATE GOVERNMENTS WILL WILL FLOW DIRECT LY TO THE SPECIALISED INSTITUTIONS/NODAL AGENCIES AS GRANT AN D THE NODAL AGENCY WILL CONSTITUTE A REVOLVING FUND WITH THE HELP OF CENTRAL AND STATE SHARES OUT OF WHICH FINANCE CO ULD BE PROVIDED TO VARIOUS AGENCIES SUCH AS WATER, SEWERAG E BOARDS, MUNICIPAL CORPORATIONS ETC. THE OBJECTIVE I S TO CREATE AND MAINTAIN A FUND FOR THE DEVELOPMENT OF INFRASTRUCTURAL ASSETS ON A CONTINUING BASIS AND, T HEREFORE, ITA NO.3669 /DEL/2012 12 THE ASSESSEE IS A NODAL AGENCY FORMED/CREATED BY THE GOVERNMENT OF KARNATAKA AS PER THE GUIDELINES; THER E IS NO PROFIT MOTIVE AS THE ENTIRE FUND ENTRUSTED AND THE INTEREST ACCRUED THEREFROM ON DEPOSITS IN BANK THOUGH IN THE NAME OF THE ASSESSEE HAS TO BE APPLIED ONLY FOR THE PURPOSE OF WELFARE OF THE NATION/STATES AS PROVIDED IN THE GUI DELINES; THE WHOLE OF THE FUND BELONGS TO THE STATE EXCHEQUE R AND THE ASSESSEE HAS TO CHANNELISE THEM TO THE OBJECTS OF CENTRALLY SPONSORED SCHEME OF INFRASTRUCTURAL DEVELOPMENT FOR MEGA- CITY OF BANGALORE. FUNDS OF ONE WING OF THE GOVERNM ENT IS DISTRIBUTED TO THE OTHER WING OF THE GOVERNMENT FOR PUBLIC PURPOSE AS PER GUIDELINES ISSUED. THE MONIES SO RE CEIVED, TILL IT IS UTILISED, IS PARKED IN A BANK. THE FIND ING RECORDED BY THE TRIBUNAL CLEARLY SHOWS THAT THE ENTIRE MONEY IN QUESTION IS RECEIVED FOR IMPLEMENTATION OF THE SCHE ME WHICH IS FOR A PUBLIC PURPOSE AND THE SAID SCHEME IS IMPL EMENTED AS PER THE GUIDELINES OF THE CENTRAL GOVERNMENT AND , THEREFORE, THE ASSESSEE IS ONLY ACTING AS A NODAL A GENCY OF CENTRAL GOVERNMENT FOR IMPLEMENTATION OF THESE PROJ ECTS. IT IS NOT THE CASE OF THE REVENUE THAT THE ASSESSEE WA S CARRYING ON ANY BUSINESS OR ACTIVITIES OF ITS OWN WHILE IMPL EMENTING THE SCHEME IN QUESTION. THE UNUTILISED MONEY, DURIN G WHICH THE PROJECT, COULD NOT BE FULLY IMPLEMENTED, IS DE POSITED IN A BANK TO EARN INTEREST. THAT INTEREST EARNED IS ALSO AGAIN UTILISED FOR THE IMPLEMENTATION OF THE MEGA-CITY, S CHEME WHICH IS ALSO PERMITTED UNDER THE SCHEME. THEREFORE IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE FOR ANY PREVIOUS YEAR THE INTEREST ACCRUED ON BANK DEPOSITS CANNOT B E TREATED ITA NO.3669 /DEL/2012 13 AS AN INCOME OF THE ASSESSEE AS THE INTEREST IS EAR NED OUT OF THE MONEY GIVEN BY THE GOVERNMENT OF INDIA FOR THE PURPOSE OF IMPLEMENTATION OF MEGA-CITY SCHEME. 19. SO, FOLLOWING THE DECISIONS RENDERED BY HONBL E HIGH COURT DISCUSSED IN PRECEDING PARA, WE ARE OF THE CO NSIDERED VIEW THAT AO/ LD. CIT(A) HAVE ERRED IN NOT CONSIDERING T HE AMOUNT OF RS. 5,55,000/- SPENT BY THE ASSESSEE SOCIETY AS IN VESTMENT IN FDRS AS OF APPLICATION OF INCOME WHICH CANNOT BE DI SALLOWED BECAUSE THE ENTIRE FUNDS ARE HELD BY ASSESSEE SOCIETY AS TR USTEE OF THE GOVERNMENT OF INDIA WHICH ARE TO BE UTILIZED WITHIN THE SPECIFIED PERIOD TO CARRY OUT THE AIMS AND OBJECTIVES OF THE ASSESSEE SOCIETY. SO THE UNUTILIZED MONEY DEPOSITED IN THE BANK TO EA RN INTEREST, WHICH IS ALSO TO BE ACCOUNTED FOR IN ORDER TO IMPLE MENT THE SCHEMES, THE INTEREST ACCRUED ON THE SAME CANNOT BE TREATED AS INCOME OF THE ASSESSEE AS THE SAME HAS BEEN EARNED OUT OF FUNDS GIVEN BY THE GOVERNMENT OF INDIA AND EARNED BY THE ASSESSEE SOCIETY FROM THE TESTING CHARGES OF ICAT MANESAR. 20. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, WE AR E OF THE CONSIDERED VIEW THAT AO/ CIT(A) HAVE ERRED IN HOLDI NG THE RECEIPT OF ICAT AS INCOME OF THE SOCIETY U/S 12 OF THE ACT AND HAS ALSO ERRED IN DISALLOWING THE AMOUNT OF RS. 5,55,000/- C LAIMED AS ITA NO.3669 /DEL/2012 14 INVESTMENT IN THE FDR, OUT OF RECEIPT OF ICAT. CONS EQUENTLY, APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 18 TH DAY OF APRIL, 2019. SD/- SD/- (R.K.PANDA) ( KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 18 TH DAY OF APRIL, 2019 BR COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XXVI, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI DATE OF DICTATION 05.04.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 18/04/2019 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 24/04/2019 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 24/04/2019 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ITA NO.3669 /DEL/2012 15 THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER