Grants do not Form Corpus of the Assessee nor is It his Income under Section 11: ITAT

The Income Tax Appellate Tribunal ( ITAT ) Delhi Bench, has, on Friday, held that grants do not form the corpus of the assessee nor is it income of the assessee under Section 11 of the Act.

The aforesaid observation was made by the tribunal while dismissing the appeals filed by the revenue on the disputed question as to whether the Commissioner of appeal (CIT(A)), was right in his holding that spending by a trust outside India without the approval of the CBDT u/s 11(1)(c) of the Act, is permissible.

Holding his opinion that the provisions of Section 11(1)of the Act be interpreted, income applied on activities outside India is non-liable for exemption unless the charitable organization happens to be a trust created before 01/04/1952 or is engaged in the promotion of International Welfare in which India is interesting, with the Central Board of Direct Taxes granting it an exemption by general or special order, the Assessing Officer (AO) made his submission before the tribunal that the expenses incurred by the assessee have thus been disallowed, following the assessment order passed by him, computing taxable income at ₹ 3,24,65,367/- as against the NIL return of income.

Hearing both parties, perusing the material on record, giving its thoughtful consideration, and finally dismissing the revenue’s appeal, the tribunal observed as below:

“In view of the discussions made as above, we do not find any legal infirmity or error in the order of the Ld.CIT(A) in deleting the addition made by the A.O and we find no merits in the grounds of Appeal of the Revenue. Accordingly, Ground No. 1 to 6 of the Revenue are dismissed, and the Appeal in ITA No. 225/Del/2018 is dismissed.

In view of the dismissal of ITA No. 225/Del/2018, since the similar issues involved in ITA No. 2356/Del/2018 and 2357/Del, the present Appeals filed by the Revenue are dismissed in terms of the order made in ITA No. 225/Del/2018.

In the result, the Appeal of the Revenue in ITA No. 2356/Del/2018 and 2357/Del/2018 are dismissed.”

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