ITO, (Exemptions), Ambala V. M/s Haryana Women Development Corporation Ltd., Panchkula

ITA 881/CHANDI/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6690 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 06-12-2018
• Assessment Year: 2010-2011
• Appeal Filed On: 11-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: TEJINDER SINGH
• Keywords: Depreciation; Question of law
• Section: 12A; 12; 2; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH A , CHANDIGARH , ! '# $ % & '# , BEFORE: SHRI SANJAY GARG, JUDICIAL MEMBER AND SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO.881/CHD/2018 / ASSESSMENT YEAR : 2010-11 THE INCOME TAX OFFICER, (EXEMPTIONS), AMBALA. M/S HARYANA WOMEN DEVELOPMENT CORPORATION LTD., SCO- 212, 2 ND FLOOR, SECTOR 14, PANCHKULA. ./PAN NO: AAAJH0127K /ASSESSEE BY : SMT.CHANDERKANTA, SR.DR / REVENUE BY : SHRI TEJINDER SINGH, ADV. ! ' /DATE OF HEARING : 06.12.2018 #$%& ' /DATE OF PRONOUNCEMENT:28.02.2019 /ORDER PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVENU E AGAINST THE ORDER DATED 28.3.2018 OF THE COMMISSION ER OF INCOME TAX (APPEALS), PANCHKULA [HEREINAFTER REFERR ED TO AS CIT(A)] PASSED U/S 250(6) OF THE INCOME TAX ACT,1961(HEREINAFTER REFERRED TO AS ACT). 2. THE SOLE ISSUE, IT WAS COMMON GROUND, WAS WHETHER SPECIFIC GRANTS-IN-AID RECEIVED BY THE ASSE SSEE WERE TO BE TREATED AS ITS INCOME TO BE APPLIED/UTIL IZED FOR THE PURPOSE OF CLAIMING EXEMPTION AS PER THE PROVISIONS OF SECTION 11 OF THE ACT. ITA NO.881/CHD/2018 A.Y. 2010-11 2 3. BRIEF FACTS RELATING TO THE CASE ARE THE ASSESSE E IS A LIMITED COMPANY REGISTERED WITH THE REGISTRAR OF CO MPANIES AND HAD BEEN GRANTED REGISTRATION AS A CHARITABLE S OCIETY U/S 12A OF THE ACT BY THE COMMISSIONER OF INCOME TA X, PANCHKULA VIDE ORDER DATED 19.03.2003 W.E.F. L.04.2 002. THE MAIN OBJECT OF THE ASSESSEE IS TO PROMOTE ACTIVITIE S FOR THE WELFARE, DEVELOPMENT AND ADVANCEMENT OF WOMEN. FOR THE IMPUGNED ASSESSMENT YEAR THE ASSESSEE FILED NIL RET URN OF INCOME. DURING ASSESSMENT PROCEEDINGS THE A.O. NOT ED THAT THE ASSESSEE HAD SHOWN GRANTS IN AID-SUBSIDY AT RS.1,48,00,000/-, GRANTS IN-AID-ADMINISTRATION AT RS.2,00,00,000/-, GRANT FOR SAKSHAR MAHILA SAMOOH A T RS.28,56,000/- AND SUBSIDY FOR NRHM SCHEME AT RS.22,92,500/- AND OTHER INCOME AT RS. 1,26,62,021/ -,WHILE UTILIZATION OF THE INCOME HAD BEEN SHOWN AS SUBSID Y DISBURSEMENT SANITARY AT RS.22,92,500/-, SUBSIDY DI SBURSED EDUCATION AT RS.1,06,85,963/-, DISBURSEMENT OF SMS GRANT RS.25,02,000/-, ADMINISTRATIVE AND OTHER EXPENSES A T RS.2,58,37,510/- AND DEPRECIATION AT RS. 1,99,793/- . THE AO OBSERVED THAT THE ASSESSEE HAD NOT SPENT 85% OF ITS GROSS RECEIPTS TOWARDS THE AIMS AND OBJECTS AND HAD EXCLU DED THE UNSPENT GRANT OUT OF THE GRANTS RECEIVED DURING THE YEAR FOR THE PURPOSE OF CALCULATING UTILIZATION AS PER PROVI SIONS OF SECTION 11(2) OF THE ACT. THE A.O. HELD THAT THE E NTIRE GRANTS RECEIVED DURING THE YEAR WAS TO BE ASSESSED AS INCOME OF THE ASSESSEE WHICH WAS TO BE UTILIZED TO THE EXTENT ITA NO.881/CHD/2018 A.Y. 2010-11 3 OF 85% AND THE ASSESSEE HAVING NOT DONE THE SAME, H E ACCORDINGLY DENIED THE ASSESSEES CLAIM OF EXEMPTIO N OF ITS ENTIRE INCOME U/S 11 OF THE ACT. THE SHORTFALL OUT OF THE 85% GROSS RECEIPTS WHICH WERE TO BE APPLIED AND ACTUAL APPLICATION, WHICH WAS OF AN AMOUNT OF RS.1,07,13,5 76/- WAS ASSESSED AS INCOME OF THE ASSESSEE. 4. THE MATTER WAS CARRIED IN APPEAL BEFORE THE LD.C IT(A) WHO ALLOWED THE ASSESSEES APPEAL HOLDING THAT UNSP ENT AMOUNT OF SPECIFIC PURPOSE GRANT RECEIVED FROM THE STATE GOVERNMENT WAS NOT PART OF ASSESSEES INCOME AND R ELIED UPON VARIOUS JUDICIAL DECISIONS IN THIS REGARD. TH E RELEVANT FINDINGS OF THE LD.CIT(A) AT PARAS 6.2 TO 6.5 OF TH E ORDER ARE AS UNDER: 6.2 FURTHER, I FIND THAT AO'S ACTION IN CONSIDERING THE UNSPENT AMOUNT OF SPECIFIC PURPOSE GRANT RECEIVED F ROM THE STATE GOVERNMENT AS PART OF APPELLANT'S INCOME FOR THE YEAR FOR THE PURPOSE OF CALCULATING THE STIPULATED 85% AMOUNT REQUIRED TO BE UTILIZED DURING THE YEAR OR THE AMOUNT TO BE ACCUMULATED UNDER PROVISIONS OF SECTION11(2) OF THE ACT IS NOT JUSTIFIED IN LAW AFTER CONSIDERATION OF VARIOUS JUDICIAL DECISIONS O N THE ISSUE AS UNDER: 6.3(I) THE JURISDICTIONAL HON'BLE PUNJAB & HARYANA HIG H COURT IN CASE OF CIT, PANCHKULA VS STATE URBAN DEVELO PMENT SOCIETY- ITA NO. 210 OF 2011 DATED 19.10.2011 HAVE DECIDED AS FOLLOWS: 'THE ENTRIES IN THE BOOKS OF ACCOUNT DO NOT DECIDE THE NATURE OF RECEIPTS. SINCE, THE GRANTS HAVE BEEN REC EIVED BY THE ASSESSEE FOR DISBURSEMENT AND KEEPING IN . V IEW THE FACT THAT THE SAME CANNOT BE UTILIZED FOR ANY OT HER PURPOSE SUCH AS DISTRIBUTION FOR THE POVERTY IN FURTHERANCE TO THE OBJECT OF THE SCHEMES, IT CANNOT BE TREATED AS INCOME OF THE ASSESSEE' (II) THE JURISDICTIONAL ITAT, CHANDIGARH IN THE CASE OF THE CHIEF ADMINISTRATOR, HARYANA RURAL DEVELOPMENT AUTHORITY VS. THE DCIT IN ITA NO.742/CHD/2012 DATED 22/01/2014 HELD T HAT 'WHERE THE AUTHORITY HAD BEEN CONSTITUTED BY THE GOVERNMENT FOR THE SPECIFIC PURPOSES OF CARRYING ON THE ACTIVITIES OF THE GOVERNMENT AND WHERE THE GRANTS A ND ADVANCES OR LOANS ARE DISBURSED BY THE GOVERNMENT T O THE ITA NO.881/CHD/2018 A.Y. 2010-11 4 ASSESSEE, THE SAID GRANTS, ADVANCES CANNOT BE HELD TO BE THE INCOME OF THE ASSESSEE AS THE SAID GRANTS/ADVAN CES ARE RELEASED TO THE ASSESSEE FOR THE SPECIFIC PURPO SES FOR CARRYING ON THE DEVELOPMENT WORK.' (III) THE JURISDICTIONAL ITAT, CHANDIGARH IN CASE OF STATE URB AN DEVELOPMENT AUTHORITY, CHANDIGARH IN ITA NO. 488/CHD /2011 DT 25.03.2012 HELD THAT 'THE ASSESSEE WAS A LOCAL BODY CONSTITUTED BY THE PRESIDENT OF INDIA. THE ASSESSEE WAS IMPLEMENTING AGENCY FOR. PUNJAB FOR IMPLEMENTING THE SCHEMES FOR THE BENEFIT OF URBAN POOR THROUGH URBAN LOCAL BODIES I.E. MUNICIPAL CORPORATION, NAC'S IN THE STATE. THE ASSE SSEE DURING THE F.Y. 2005-06 WAS ENGAGED IN IMPLEMENTING SWAYARNA JAYANTI ROZGAR YOJANA, A SCHEME WHICH AIMS AT IMPROVING LIVING STANDARDS OF THE URBAN POOR. THE ASSESSEE WAS RECEIVING FUNDS FROM UNION GOVERNMENT AND STATE GOVERNMENT AND WAS DISBURSING THE SAME TO VARIOUS MUNICIPALITIES IN ACCORDANCE WITH THE GUIDEL INES OF THE SCHEME. THE ASSESSEE WAS NOT ENGAGED IN ANY OTHER ACTIVITY AND WAS NOT GENERATING ANY REVENUE AND ACCORDINGLY NOT DRAWING ANY INCOME EXPENDITURE/PROFIT & LOSS ACCOUNT. THE OPERATIONAL EXPENSES OF THE ASSESSEE WERE BEING MET OUT OF THE FUNDS(5%) PORTION BEING ALLOCATED AGAINST THE SCHEMES. THE ASSESSEE WAS THE CUSTODIAN OF THE FUNDS RECEIVED FRO M CENTRAL AND STATE GOVERNMENTS AND WAS HOLDING THE FUNDS PENDING DISBURSEMENT IN SAVING BANK ACCOUNTS WITH BANKS IN ACCORDANCE WITH THE DIRECTIONS OF THE CENTRAL/STATE GOVERNMENT. THE INTEREST EARNED ON THE SAID FUNDS DEPOSITED IN THE BANK ACCOUNTS, AS CLAIMED BY THE ASSESSEE WAS THE INCOME OF CENTRAL/STATE GOVERNMENTS, TO WHOM THE FUNDS BELONGED, WHICH IN TURN WERE PARKED IN FIXED DEPOSITS WITH BANKS. NO PART OF THE SAID INTEREST INCOME AROSE TO THE ASSESSEE' (IV) THE HON'BLE HIGH COURT OF KARNATAKA IN THE C ASE OF CIT VS. KARNATAKA URBAN INFRASTRUCTURE DEVELOPMENT AND F INANCE CORPORATION REPORTED IN 284 ITR 582 HELD THAT 'THE AMOUNTS RECEIVED BY THE CENTRE FOR IMPLEMENTING CERTAIN SCHEMES ENVISAGES BY GOVERNMENT IS NOT TAXAB LE IN THE HANDS OF THE ASSESSEE SINCE THE ASSESSEE IS ONLY AN IMPLEMENTING AGENCY. IT WAS FURTHER HELD BY THE HON'BLE HIGH COURT THAT THE INTEREST FROM DEPOSITS MADE OUT OF THE GRANTS RECEIVED FROM THE GOVERNMENT IS ALSO NOT TAXABLE.' (V) THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CA SE OF CIT VS. THE PUNJAB STATE-E-GOVERNANCE IN ITA NO. 75 OF 2011 (JUDGMENT DATED 21ST APRIL,2011) WAS CONSIDERING THE FOLLOWING SUBSTANTIAL QUESTION OF LAW: WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE ITAT WAS JUSTIFIED IN UPHOLDING THE DECISION OF ID.CI T(A) AND DELETING THE ADDITION OF RS. 10,80,40,2 127- MADE BY THE A.O. ON ACCOUNT OF UNUTILIZED PORTION OF GRANT RECEI VED FROM THE STATE GOVERNMENT? ITA NO.881/CHD/2018 A.Y. 2010-11 5 WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE ITAT WAS JUSTIFIED IN UPHOLDING THE DECISION OF LD .CIT(A) AND DELETING THE ADDITION OF RS.65,89,6787/- MADE B Y THE A.O. ON ACCOUNT OF INTEREST EARNED ON FDRS? IN CONSIDERING THE ABOVE SUBSTANTIAL QUESTION OF LA W, THE HON'BLE HIGH COURT HELD THAT GRANT IN AID RECEIVED FROM THE GOVERNMENT FOR SPECIFIC PURPOSE CANNOT BE TAXED IN THE HANDS OF THE ASSESSEE. IT WAS FURTHER HELD BY THE H ON'BLE HIGH COURT THAT THE INTEREST RECEIVED BY THE ASSESSEE ON THE AMOUNT OF GRANT DEPOSITED IN THE BANK WAS ALSO IN T HE NATURE OF GRANT ITSELF. (VI) THE HON'BLE GUJARAT HIGH COURT IN CIT VS. GUJA RAT SAFAI KAMDAR VIKAS NIGAM IN ITA.NO.1934 OF 2009 VIDE ITS ORDER DATED 02.05.2011 DISMISSED THE APPEAL OF REVENUE AND HELD THAT WHEN SPECIFIC PURPOSE GRANT IS MADE AVAILABLE TO THE CORPORATION FOR IMPLEMENTING THE SCHEME IN A PARTIC ULAR MANNER, THE GRANT IN QUESTION FULFILLS THE REQUIREMENTS OF SECTION 11(1)(D) READ WITH SECTION 12(1) OF THE ACT AND THE ASSESSEE IS NOT LIABLE TO PAY TAX ON SUCH RECEIPT. 6.4 THUS THE SPECIFIC PURPOSE GRANTS HAVE NOT BEEN CONSIDERED AS THE INCOME OF ASSESSEE BY THE VARIOUS COURTS AS DISCUSSED ABOVE. THEREFORE, NON UTILIZATION OF THESE GRANTS A LSO WOULD NOT MAKE THEM TAXABLE. THE UNSPENT AMOUNT OF GRANT IS I N THE NATURE OF LIABILITY AS THE UNUTILIZED AMOUNT MAY HAVE TO BE R ETURNED TO THE GOVERNMENT AS PER THE TERMS AND CONDITIONS OF THE G RANT AT THE END OF THE SCHEME OR THE AMOUNT IS LIABLE TO BE ADJ USTED AGAINST RELEASE OF NEXT YEARS' GRANT. EVEN IF THE APPELLANT FOLLOWS AN INCORRECT METHOD OF ACCOUNTING OR MISTAKENLY ADMITS ANY GRANT RECEIPT AS INCOME, THE SAME IS NOT LIABLE TO BE TRE ATED AS INCOME ONLY ON THE REASON OF APPELLANT HAVING CLAIMED SO B ECAUSE WHAT HAS TO BE ASSESSED IS THE CORRECT INCOME OF APPELLA NT. THE APPELLANT IS A NODAL AGENCY ESTABLISHED FOR DEV ELOPMENT AND WELFARE OF WOMEN IN THE STATE OF HARYANA UNDER THE ADMINISTRATIVE SUPERVISION OF DEPARTMENT OF WOMEN & CHILD DEVELOPMENT, GOVERNMENT OF HARYANA. THE GOVERNMENT OF INDIA AND GOVERNMENT OF HARYANA ARE EXECUTING VARIOUS WEL FARE SCHEMES FOR WOMEN THROUGH THE APPELLANT CORPORATION AND FOR THIS PURPOSE IT IS RECEIVING SPECIFIC PURPOSE GRANT FROM GOVERNMENT AND DISTRIBUTES IT TO DISTRICT AUTHORITIES FOR IMPL EMENTATION OF VARIOUS SCHEMES OF GOVERNMENT AND SUPERVISES THE EX ECUTION OF SCHEMES IN THE FIELD, APPELLANT FOLLOWS THE SYSTEM OF ACCOUNTING WHEREBY ANY AMOUNT OF GRANT REMAINING NO T DISBURSED AT THE END OF FINANCIAL YEAR IS SHOWN AS OP ENING BALANCE OF SCHEME MONEY TO BE UTILIZED IN THE NEXT F INANCIAL YEAR. IT IS NOTICED THAT APPELLANT HAS TO UTILIZE THE GR ANTS AS PER THE SCHEMES FORMULATED BY GOVERNMENT AND HAS NO DIS CRETION TO UTILIZE IT AS PER OWN REQUIREMENT AND IN CASE OF NON UTILIZATION/UNDER UTILIZATION THE FUNDS RECEIVED ARE TO BE RETURNED ALONG WITH INTEREST OR ARE ADJUSTED AGAINST SUBSEQUENT YEARS' RELEASES. THE SPECIFIC PURPOSE GRAN TS DO NOT FALL IN THE CATEGORY OF CORPUS GRANTS/DONATIONS. THEY ARE NOT ARISING OUT OF PROPERTY OF APPELLANT AND ARE NO T TO BE CONSIDERED ITS INCOME U/S 11 OF THE ACT. AS CAN BE SEEN FROM THE ASSESSMENT ORDER TOO, IT IS NOT THE CASE OF THE A O THAT ITA NO.881/CHD/2018 A.Y. 2010-11 6 THESE UNSPENT GRANTS WERE NOT SPECIFIC PURPOSE GRAN TS IN NATURE. 6.5 THUS I AM IN AGREEMENT WITH THE CONTENTION OF THE APPELLANT THAT PROVISIONS OF SECTION 11 & 12 OF THE A CT ARE NOT APPLICABLE TO SPECIFIC PURPOSE GRANTS RECEIVED BY AP PELLANT UNDER THE SCHEMES TO BE IMPLEMENTED THROUGH IT BY GOVERNMENT. GRANTS RECEIVED FOR SUBSIDY DISBURSEMEN T OF INDIVIDUAL LOANEE SCHEME AND INTEREST SUBSIDY EDUCA TION SCHEME, GRANT FOR SAKSHAR MANILA SAMOOH GROUPS AND S UBSIDY FOR NRHN WERE ALL IN THE NATURE OF SPECIFIC PURPOSE GRANTS AND OUT OF THESE THE UNSPENT AMOUNT OF RS. 1,14,06,437/-, RS.4,54,000/- AND NIL RESPECTIVELY WERE CARRIED FORWARD AS LIABILITY TO BE UTILIZED IN SUBSEQUENT YEAR AS IN THE EVENT OF NON UTILIZATION OF THE SAME IT WAS LIABLE TO BE REFUNDED TO HARYANA GOVERNMENT/GOVERNMENT OF INDIA. HOWEVER IN THIS CAS E THE APPELLANT HAS ITSELF TREATED THE AMOUNT OF SPECIFIC PU RPOSE GRANTS TO THE EXTENT UTILIZED DURING THE FINANCIAL YE AR UNDER QUESTION ALONGWITH THE UNUTILIZED AMOUNTS BROUGHT FOR WARD FROM THE IMMEDIATELY PRECEDING YEAR TO THE EXTENT AC TUALLY UTILIZED AS ITS INCOME OF THE CURRENT YEAR ALTHOUGH THE PROVISIONS OF SECTION 11 & 12 OF THE ACT ARE NOT AP PLICABLE FOR SPECIFIC PURPOSE GRANTS RECEIVED BY HE APPELLANT FRO M THE GOVERNMENT OF HARYANA OR THE GOVERNMENT OF INDIA UND ER SCHEMES TO BE IMPLEMENTED THROUGH IT. ALTHOUGH THE APPE LLANT HAS ITSELF REFLECTED GRANTS RECEIVED (TO BE EXTENT UT ILIZED) AS INCOME, IT IS NOTED FROM THE FACTS OF THE CASE AND PR INCIPLES LAID DOWN IN JUDICIAL PRECEDENTS DISCUSSED ABOVE, THAT MERE REFLECTION IN P & L A/C TOWARDS INCOME IS NOT DETERM INATIVE AND ENTRIES IN BOOKS OF ACCOUNT DO NOT DECIDE NATUR E OF RECEIPTS AND SINCE THE GRANTS ARE SPECIFIC PURPOSE GRANTS RECEIVED FOR DISBURSEMENT THEY CANNOT BE TREATED AS INCOME OF THE APPELLANT. IN VIEW OF THE SAME, THE APPELLANT IS ALSO NOT OBLIGED TO FILE ANY CERTIFICATE FOR UTILIZATION OF ACCUMULATED FUNDS OUT OF SPECIFIC PURPOSE GRANTS RECEIVED BY WA Y OF FILING FORM NO. 10. HOWEVER THE GRANT-IN-AID FOR ADMINISTRAT ION, RECEIVED FOR MEETING THE ADMINISTRATIVE AND OTHER E XPENSES OF APPELLANT, BEING REFLECTED IN THE INCOME AND EXPENDITU RE STATEMENT WOULD FORM THE INCOME FOR THE PURPOSE OF S ECTION 11 & 12 OF THE ACT AND APPELLANT WOULD BE REQUIRED TO FILE ITS INTENTION OF EXPENDING THE ACCUMULATED FUNDS IN FUT URE BY WAY OF FORM NO. 10 IF THERE IS A SHORTFALL IN APPLICAT ION DURING THE FINANCIAL YEAR. THEREFORE, THE SPECIFIC PURPOSE G RANTS RECEIVED CANNOT BE TREATED AS INCOME OF THE APPELLAN T CORPORATION FOR THE PURPOSE OF CALCULATION OF UTILI ZATION OR THE AMOUNT TO BE ACCUMULATED UNDER PROVISIONS OF SEC TION 11(2) OF THE ACT AND THEREFORE THE AO WAS NOT JUSTI FIED IN TREATING THE UNSPENT GRANT AS INCOME OF APPELLANT. ACCORDINGLY, THE ADDITION OF RS. 1,07,73,576/- ON AC COUNT OF SHORT APPLICATION OF INCOME IS ORDERED TO BE DELETED AND AO IS DIRECTED TO RE-COMPUTE THE INCOME BY EXCLUDING THE SPECIFIC PURPOSE GRANTS. THE GRANT OF APPEAL NO.3 TO 7 ARE ACCORDINGLY ALLOWED. ITA NO.881/CHD/2018 A.Y. 2010-11 7 5. AGGRIEVED BY THE SAME, THE REVENUE HAS COME UP IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS: I. THAT THE ORDER OF THE LD.CIT(A) IS DEFECTIVE BOTH IN LAW AND FACTS OF THE CASE. II. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS ERRED IN LAW BY DELETING THE ADDITION OF R S. 1,07,13,576/- MADE BY THE A.O. ON ACCOUNT OF UNUTILIZED PORTION OF GRANT RECEIVED FROM THE STATE GOVERNMENT. III. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS ERRED IN LAW BY HOLDING THAT THE SPECIFIC PURPOSE GRANTS RECEIVED BY THE ASSESSEE ARE NOT TO B E TREATED AS ITS INCOME WHEREAS THE SAID GRANTS WERE ITSELF DECLARED BY THE ASSESSEE AS INCOME (REVENUE RECEIPTS) IN ITS INCOME & EXPENDITURE ACCOUNT. IV. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS ERRED IN LAW EVEN WHEN THE ASSESSEE ITSEL F HAS NOT FOLLOWED THE JUDGMENT OF THE HON'BLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT, PANCHKULA VS. STATE URBAN DEVELOPMENT SOCIETY IN ITA NO. 210 O F 2011 WHERE THE COURT HAS HELD THAT THE ASSESSEE IS STATUTORILY REQUIRED TO FILE ITS INTENTION OF EXPAN DING THE ACCUMULATION FUND IN FUTURE BY WAY OF FORM 10 WHEREAS THE ASSESSEE DID NOT FILE FROM NO. 10 DURING THE COURSE OF ASSESSMENT PROCEEDINGS. V. THAT THE APPELLANT CRAVES TO LEAVE, ADD OR AMEND THE GROUNDS OF APPEAL ON OR BEFORE THE APPEAL HEARD AND DISPOSED OFF. 6. DURING THE COURSE OF HEARING BEFORE US, THE LD. DR RELIED UPON THE ORDER OF THE A.O., THOUGH HE FAI RLY CONCEDED THAT THE PROPOSITION OF LAW IN THIS REGAR D THAT SPECIFIC PURPOSE GRANTS WERE NOT IN THE NATURE OF INCOME, AS POINTED OUT BY THE LD.CIT(A), WAS IN FAV OUR OF THE ASSESSEE. 7. THE LD. COUNSEL FOR ASSESSEE, ON THE OTHER HAND, RELIED UPON THE ORDER OF THE LD.CIT(A). ITA NO.881/CHD/2018 A.Y. 2010-11 8 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE ISSUE BEFO RE US IS REGARDING THE TREATMENT OF GRANTS RECEIVED BY THE ASSESSEE AS BEING IN THE NATURE OF INCOME OR NOT FO R THE PURPOSE OF DETERMINING THE UTILIZATION OF THE INCOME OF THE ASSESSEE UPTO THE SPECIFIED LIMIT FOR CLAIMING ITS INCOME EXEMPT U/S 11 OF THE ACT. THE LD.CIT(A) HAS HELD THE GRANTS RECEIVED BY THE ASSES SEE BEING SUBSIDY DISBURSEMENT OF INDIVIDUAL LOANEE SCHEME AND INTEREST SUBSIDY EDUCATION SCHEME, GRANT FOR SAKSHAR MAHILA SAMOOH GROUPS AND SUBSIDY FOR NRHN, AS SPECIFIC PURPOSE GRANTS. THIS FACT HAS REMAINED UNCONTROVERTED BEFORE US BY THE REVENUE. THE LD.CIT(A) HAS FURTHER RELIED UPON VARIOUS DECISIONS INCLUDING THAT OF THE HON'BLE JURISDICTIO NAL HIGH COURT IN THE CASE OF CIT, PANCUKULA VS. STATE URBAN DEVELOPMENT SOCIETY IN ITA NO.210 OF 2011 DATED 19.10.2011 FOR THE PROPOSITION THAT THE SPECI FIC PURPOSE GRANT CANNOT BE TREATED AS INCOME OF THE ASSESSEE. THE LD.DR HAS FAIRLY CONCEDED TO THIS PROPOSITION OF LAW AND HAS NOT POINTED OUT ANY CONTRARY DECISION IN THIS REGARD. 9. IN VIEW OF THE AFORESTATED FACTS AND POSITION OF LAW, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF T HE LD.CIT(A) IN HOLDING THE IMPUGNED GRANTS NOT ASSESSABLE AS THE INCOME OF THE ASSESSEE. THE ASSES SEE THEREFORE WAS NOT REQUIRED TO UTILIZE THE SAME UPTO THE ITA NO.881/CHD/2018 A.Y. 2010-11 9 SPECIFIED LIMIT OF 85% AS PER SECTION 11 OF THE ACT . IN VIEW OF THE ABOVE, ALL GROUNDS OF APPEAL RAISED BY THE REVENUE ARE DISMISSED. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- $ % & '# (SANJAY GARG) (ANNAPURNA GUPTA) /JUDICIAL MEMBER () /ACCOUNTANT MEMBER +$ /DATED: 28 TH FEBRUARY, 2019 * # * $'( )*+* / COPY OF THE ORDER FORWARDED TO : 1. , / THE APPELLANT 2. (-, / THE RESPONDENT 3. . / CIT 4. . ( )/ THE CIT(A) 5. */0( 1 , ' 1 , 23405 / DR, ITAT, CHANDIGARH 6. 046! / GUARD FILE $' / BY ORDER, / ASSISTANT REGISTRAR