Income Tax Appellate Tribunal - Kolkata
Ito (Exemption) Ward - 1(1), Kolkata, ... vs M/S. Central Tool Room & Training ... on 10 May, 2019
IN THE INCOME TAX APPELLATE TRIBUNAL "C" BENCH : KOLKATA
[Before Hon'ble Shri S.S. Godara, JM & Hon'ble Shri Dr. Arjun Lal Saini, AM]
I.T. A No. 1684/Kol/2017 A.Y 2014-15
I.T.O (Exemption), Vs. Central Tool Room &
Ward-1(1), Kol. Training Centre, Kolkata
PAN: AAAAC2480P
(Appellant) (Respondent)
For the Appellant : Shri Robin Choudhury, Addl. CIT (DR)
For the Respondent : Shri Arvind Agarwal, Advocate, ld.AR
Date of Hearing : 22-04-2019
Date of Pronouncement: 10 -05-2019
ORDER
Shri S.S. Godara, JM:
1. This Revenue's appeal for assessment year 2014-15 arises against the CIT(A), 25, Kolkata's order dated 02-05-2017 passed in case no. ITBA Appeal No. CIT(A), Kolkata 25/10322/2016-17 involving proceedings u/s 143(3) of the I.T Act, 1961 (in short 'Act') .
2. Heard both the parties. Case file as well as assessee's detailed paper book comprising of hon'ble jurisdictional high court's decision, the CIT(A)'s findings, annual accounts for F.Ys 2011-12 to 2013-14, Form 10B for the F.Y 2013-14, annual accounts for F.Y 2014-15, acknowledgement and I.T returns for the A.Y 2012-13 to A.Y 2015-
16, section 12A registration certificate, statement of expenditure incurred against Govt. grants from F.Ys 2013-14 to 2014-15 with copies of ledger accounts, correspondence with regard to grant's utilization and directions of utilization certificate issued by 2 ITA No. 1684/Kol/2017 ITO, E, W 1(1) Kol Vs. Central Tool Room & Training Centre, Kolkata Govt. of India, utilization of certificates and various judicial precedents etc., stand perused.
3. The Revenue first of all takes us through the CIT(A)'s findings under challenge holding the assessee is a Govt. of India organization and also deleting addition of Rs. 8,21,56,000/- on sum allotted by Govt. of India as follows:-
"6. The Points for Determination in this Appeal.
I have gone through the matter.
The issue involved actually only requires the basic entire perspective to be seen; not just mere accounting treatment. The issue then becomes very elementary and straight-forward.
Thus the following are the Points for Determination arising:
A. Who is the appellant- whether it is liable to be assessable to income-tax in the first place?
B. The Government Grants- the finding, the allocation, the government rules to be observed/complied.
C. Whether such grants had been received in earlier years/later years. D. On the Grounds of Appeal, per se.
7. Who is the appellant- whether it is liable to be assessable to income-tax in the first place ?
7.1 In the Annual Report of the appellant institution:
1. Introduction:
Central Tool Room & Training Centre (CTTC) Kolkata had been established in the year 1978 under the Technical Cooperation Programme between Government of India and Government of Denmark. In order to provide grater autonomy, the Centre was established as a Govt. of India Society. The Management of affairs of the Centre rests with the Governing Council constituted by Govt. of India. Additional Secretary & Development Commissioner (MSME), Ministry of Micro, Small & Medium Enterprises, Govt.2 3 ITA No. 1684/Kol/2017
ITO, E, W 1(1) Kol Vs. Central Tool Room & Training Centre, Kolkata of India is the President of the Society and Chairman of its Governing Council.
The Governing Council, for the relevant FY 201314, is
10. GOVERNING COUNCIL DETAILS:
The Governing Council of the Tool Room was constituted vide office of the AS & DC Letter No. 21/05/Recons/Kol/2014/TRII dated 25.02.2014 for a period of 3 years or till the time it is constituted.
Governing Council as on 31.3.2014
1.Additional Secretary & Development Commissioner, : Chairman of
GC (MSME)Ministry of MSME, Nirman Bhawan, 7th Floor, and Ex
officioNew Delhi110 108 President of
the Society
2. Joint Secretary, Ministry of MSME, Udyog Bhavan, : Member
New Delhi
3. Director (TR) alternatively DD(TR), Office of the DC (MSME), Nirman Bhawan, 7th Floor, New Delhi110108 : Member
4. Director/US(IF Wing), Ministry of MSME, Udyog Bhavan, New Delhi110 108 : Member
5. Director, MSME Development Institute, Kolkata700 108 : Member
6. Principal Secretary, Micro & Small Scale Enterprises & Textiles, Govt of West Bengal, Writers' Building, Kolkata : Member 3 4 ITA No. 1684/Kol/2017 ITO, E, W 1(1) Kol Vs. Central Tool Room & Training Centre, Kolkata
7. Director of Industries, Govt of Manipur, Secretariat North Block, Imphal795 001. : Member
8. Director of Industries, Govt of Sikkim, Gangtok Secretariat, Annexe1, S.T Marg, Gangtok737001. : Member
9. Secretary, Technical Education & Training Department , Govt. of W.B, Vikash Bhawan, Salt Lake700 091. : Member
10. General Manager, Ordnance Factory Dumdum, Jessore Road, Dumdum, Kolkata700 028 : Member
11. HoD, Mechanical Engineering Department, Jadavpur University, Kolkata700 032. : Member
12. President Alternatively Secretary, Bengal National Chamber of Commerce & Industries, 23 R.N Mukherjee Rd, Kolkata700 001. : Member
13. Shri Biprodas Chakraborty, 88/A Roy Bahadur Road, Behala, Kolkata, Honorary Director, M/s. Miracle Info Web Pvt. Ltd, Kolkata : Member
14. The President, Indian Plastics Federation, 88 Royd Street, 1st Fl., Kolkata : Member
15. Shri Pushpjeet Yaduka, FCA C/o Singhania Agarwal & Co., Chartered Accountants, C5 Omer Mansion, 29A Weston Street, Kolkata : Member Secretary
16. General Manager, Central Tool Room & Training Centre, Kolkata700 108 : Member Secretary The following Governing Council/AGM Meeting was held during the year 201314 25.09.2014 - 80th GC Meeting at O/o MSME, New Delhi 25.09.2014 - 36th GC Meeting at O/o MSME, New Delhi So the appellant institution is an institution of the Government of India under the Ministry of Micro, Small & Medium enterprises [ MSME]. The Government appoints/constitutes the Governing Council which consist of senior government officials in the ministry of MSME, Director of Industries of State Governments [ in the Eastern States]. Government Ordnance Factory, University, and som representatives from the Trade & Industry. The Chairman of the Governing Council is the Additional Secretary & Development Commissioner [MSME], Ministry of MSME, Govt. of India.
The appellant is a government institution.
4 5 ITA No. 1684/Kol/2017ITO, E, W 1(1) Kol Vs. Central Tool Room & Training Centre, Kolkata 5 6 ITA No. 1684/Kol/2017 ITO, E, W 1(1) Kol Vs. Central Tool Room & Training Centre, Kolkata
8. The Government Grants the funding, the allocation, the government Rules. 8.1 What is 'government grant'?
Government grant is under Article 113 of The Constitution of India whereby Parliament votes on the Finance Bill, i.e the Budget Estimates for the financial year. The vote is to approve the expenditure from the Consolidated Fund of India. The following extract from the "Key to the Budget Documents '[ from Finance Ministry websitewww.finmin.gov.in explains 'Grants'
3. (B) Demands for Grants
i) Article 113 of the Constitution mandates that the estimates of expenditure from the Consolidated Fund of India included in the Annual Financial Statement and required to be voted by the Lok Sabha, be submitted in the form of Demands for Grants. The Demands for Grants are presented to the Lok Sabha along with the Annual Financial Statement. Generally, one Demand for Grant is presented in respect of each Ministry or Department. However, more than one Demand may be presented for a Ministry or Department depending on the nature of expenditure. With regard to Union Territories without Legislature, a separate Demand is presented for each of such Union Territories. In budget 201718 there are 100 Demands for Grants. Each Demand initially gives separately the totals of (i)'voted' and 'charged' expenditure; (ii) the 'revenue' and the 'capital' expenditure and (iii) the grand total on gross basis of the amount of expenditure for which the Demand is presented, This is followed by the estimates of expenditure under different major heads of account. The amounts of recoveries are also shown. The net amount of expenditure after reducing the recoveries from the gross amount is also shown. A summary of Demands for Grants is given at the beginning of this document, while details of 'New Service:
or 'New Instrument of Serves' such as, formation of a new company, undertaking or a new scheme, etc., if any, are indicated at the end of the document.
(ii) Each Demand normally includes the total provisions required for a service, that is, provisions on account of revenue expenditure, capital expenditure, grants to State and Union Territory Governments and also loans and advances relating to the service. Where the provision for a service is entirely for expenditure charged on the Consolidated Fund of India, for example, interest payments (Demand for Grant No. 37), a separate Appropriation, as distinct from a Demand, is presented for that expenditure and it is not required to be voted by the Lok Sabha. Where, however, expenditure on a service includes both 'voted' and 'charged' items of expenditure, the latter are also included in the Demand presented for that service but the 'voted' and 'charged' provisions are shown separately in that Demand.6 7 ITA No. 1684/Kol/2017
ITO, E, W 1(1) Kol Vs. Central Tool Room & Training Centre, Kolkata Grant is from the Consolidated Fund of India. Grant is only for specific purpose to be expended. Thus, there just cannot be any element of 'income'in a Grant.
8.2 Accounting for the Grant:
Grant being allocation of Fund from the Consolidated Fund of India it thus just follows that the Government Rules on Financial matters are to be observed and followed. The main Rules are in the General Financial Rules, 2005' [GFR]. In the GFR are rules for allocation, accounting, sanction, utilisation, etc. .
That is why in the Release of Grant letter itself is specifically mentioned that the Grant will be subject to the provisions contained in the General Financial Rules, 2005. One of the release letters is hereunder:
No. 21/08/Kol/201314/TRI Date: 10062013 To The Pay & Account Officer, PAO (MSME), Nirman Bhawan, New Delhi.
Sub : Release of GrantinAid (Plan/NonRecurring) to Central Tool Room & Training Centre (CTC), Kolkata for the financial year 201314 under Tool Room & Technical Institutions.
Sanction of the President of India is hereby conveyed to the release of Rs. 241.56 lakh (Rupees Two Crore Forty one Lakb Fifty six Thousand only) towards non recurring GrantinAid (Creation o[ Capital As~) to Central Tool Room &; Training Centre (CITC), Kolkata [or nonrecurring expenses as per Action Plan for the financial year 201213.
2. The grantinaid will be regulated in accordance with the provisions contained in the scheme/guidelines. The GrantInAid is also subject to the provisions contained in Chapter 9 of the General Financial Rules, 2005, as amended from time to time, read with the Government of India's decisions incorporated then: under, and any other guidelines which may be issued in this regard, and in particular to the following conditions:
(i) The gran! shall be utilized [or the purpose of creating capital assets. Its utilization would result in achievement of the following quantitative and qualitative targets to be fixed by Competent Authority :
S.No. Activity Target 7 8 ITA No. 1684/Kol/2017 ITO, E, W 1(1) Kol Vs. Central Tool Room & Training Centre, Kolkata 1. Cash Cost Recovery Ratio (CCRR) % 2. Trainees Trained 3. Units benefited
(ii) The I institution shall maintain separate subsidiary bank accounts for the Government Grants received and utilized. In addition, 'a separate Bank account shall be maintained for the Government Grants'.
(iii) The Grant released will be utilized by Central Tool Room & Training Centre (CTTC), Kolkata by 31.03.2015 for the purposed indicated in para 2(i) above
(iv) Central Tool Room & Training Centre (CTTC), Kolkata may furnish their performancecumachievement report on or before 31.03.2014 to the sanctioning Authority.
(The bank account should be same which was authorized for operation at the time of registration under the 'Central Plan Scheme Monitoring System'(CPSMS) of the Ministry of Finance) (V) Central Tool Room &: Training Centre (CTT'C). Kolkata should maintain a register of permanent and semipermanent assets acquired wholly or mainly out of the above grant In the prescribed format and copy thereof should be, furnished to this Ministry.
(vi) Assets .acquired wholly or substantially out of Government Grant &hall not be disposed of without obtaining the prior approval of the sanctioning authority of Grant inaid.
(vii) The .accounts of Central Tool Room & Training Centre (CTTC), Kolkata shall be open for inspection by the sanctioning authority and audit., both by the Comptroller & Auditor General of India under the provision of C&.AG(DPC) Act, 1971 in accordance with the provisions laid down in Section 14 of the C&.AG (DPC 1971) as amended from time to time and Internal Audit part of the Principal Accounts Office of the MSME, whenever It is called upon to do so.
(viii) The grantee shall subm.it the Utilization Certificate in the prescribed form GFR 19A duly signed by the Head of the institution/Grantee latest by 31.03.2015. The uti1i.lization certificate in respect of grants should disclose whether the specified. quantified and qualitative targets that should have been reached against the amount utilized were in fact reached. and if not, the reasons therefore. They should contain an outputbased performance assessment instead of input based performance assessment.
(ix) Central Tool Room & Training Centre (CTTC). Kolkata shall furnish an Audited Statement of Accounts of the financial year before 30.09.2014.
(x) GrantinAid shall be utilized subject to the Economy and other Instructions issued from time to time by the M/o Finance or by the Competent Authority.
8 9 ITA No. 1684/Kol/2017ITO, E, W 1(1) Kol Vs. Central Tool Room & Training Centre, Kolkata
(xi)The unspent balances available with Central Tool Room &. Training Centre (CTTC). Kolkata have been taken into account.
(xii)Central Tool Room &. Training Centre (C'T'TC), Kolkata shall certify that the utilization certificates due for submission for Grantsinaid sanctioned in the previous years containing all the relevant details under GFR 212(1) have been submitted to the satisfaction of the Minister (MSME).
(xiii) Central Tool Room & Training Centre (CTTC). Kolkata shall certify that no grantinaid for this purpose or activities have been applied for or obtained from any other Ministry or Department of the Government of India or State Government.
(xiv) *(Applicable in case of grantee Institution receiving more than 50% of their recurring expenditure in the form of grantsinaid)
(a) Central Tool Room & Training Centre (C1IC), Kolkata shall ensure that all the terms and conditions of the service of their employees are not higher than those applicable to similar categories of employees of Central Government, and where it is not in accordance with above. the relaxation of Ministry of Finance has been obtained as required under GFR 209(6)(iv)(a).
(b) Central Tool Room a: Training Centre (CTTC), Kolkata will make reservations for Scheduled Castes and Scheduled Tribes or OBC in the posts or services under its control on the lines indicated by the Government of India,
(xv) Central Tool Room &. 1'rain.ing Centre (CITC). Kolkata shA1J adhere to all the relevant provisions of OFR and any other instructions/guidelines issued by the Government from time to time, while making procurement/purchases of goods and services including compliance to GFR provisions in ease of outsourcing of services and engagement of consultants.
(xvi) #Before release of paymen1 involved in this sanction, the members of the Executive Committee of Central Tool Room &. Training Centre (CITC), Kolkata will have to execute e bond in the prescribed format binding themselves jointly and serverally to abide by the conditions of grantinaid, In the event of failing to comply with the conditions of the bond, the signatories of the bond shall be jointly and severally liable to refund to the President of India. the whole or pert amount of the grant with i.ntues1 at ten per cent per annum thereon or the sum specified under the bond.
Or 9 10 ITA No. 1684/Kol/2017 ITO, E, W 1(1) Kol Vs. Central Tool Room & Training Centre, Kolkata # Central Tool Room & Training Centre (CITC). Kolkata has been exempted from execution of the bond. Central Tool Room & Training Centre (CTTC), Kolkata shall, however, furnish an undertaking that it will comply with all the terms and condition stipulated in the sanction order.
(xvii) Central Tool Room &. Training Centre (CITC), Kolkata should send pre receipted bill to this Ministry for payment of the amount drawn against this sanction. (xviii) In no case the grant released under this sanction will be utilized for any purpose other than those indicated in the sanction. The grantee shall not divert the grants and entrust execution of the Scheme or work concerned to another Institution or Organization and shell abide by the terms & conditions of the grant and follow/adhere to all the relevant provisions of GFR regarding Grantsinaid. If the grantee fails to utilize the grant for the purpose for which the same has been sanctioned or does not adhere to the terms & condition of Grant and GFR provisions, the grantee/Institution shall be required to refund the grant with interest @10% per annum.
(xix) Noted at Serial No. 04 in the Resister of Grants.
(xx) Shri Harpal Deswal, 000 of the Office of DC, MSME will act as Drawing and Disbursing Officer for this sanction,
3. It is certified that "No Utilization Certificate due for rendition is pending from CTTC,Kolkata.
4. The total release under this object head. including the present sanction would be Rs.
241..56 .lakh during the current financial year as against the Budget provision of Rs. 1000.00 lakh for the financial year 201314.
5. The expenditure of is dubitable to:
Major Head '2851' Village and Small Industries Minor Head '00.102' Small Scale Industries Sub Head 77 Infrastructure Development and Capacity Building (Erstwhile MSMB Cluster Development Programme and MSME Growth Poles) 77.00.35 GrantinAid for Creation of Capital Assets in Grant No. '66' Ministry of MSME for the year 201314
6. The bank details of the Grantee institution for making payment are as below ; 10 11 ITA No. 1684/Kol/2017 ITO, E, W 1(1) Kol Vs. Central Tool Room & Training Centre, Kolkata Name of the Name of Bank Address/Code A/C No. MICR Code beneficiary A/c of Org. of Bank Branch and IFSC Code Held Central Tool State Bank of Bonhooghly 10471732068 700002150 and Room & India Industrial SBIN0002029 Training Estate, Kolkata Centre (CTTC), Kolkata
7. This issues with the concurrence of Integrated Finance Wing vide their Dy. No. 151/F1/13 dated 07.06.2013. Sd/ (Jaipal Singh) Dy. Director (TRII) Copy to:
1. General Manager, CITC, Kolkata with reference to his letter No. CTTC/l3 Vol.XVllI1314 dated 04.05.2013.
2. IF Wing, (FJ Section), w.r.t their Dy.No. mentioned above.
3. Accountant General, Kolkata, West Bengal.
4. Planning Division, Office of DC(MSME), New Delhi.
5. Cash Section, Office of DC{MSM£), New Delhi.
6. 0/0 Principal Director (Audit), Economic &. Service Ministries, AGCR Building. LP. Estate, New DelhiI 10002
7. Section/Guard File Sd/ (Jaipal Singh) Dy. Director (TRII) [Note: The appellant institution. during the relevant year. received 4 government grants comprising of Rs. 2,4 I Crore (printed above). Rs.3.80 Crore, ~ 1.00 Crore, and Rs. 1.00 Crore. All these 4 Grants total to the impugned Rs. 8,21,56,0001].
The above letter of Release of Grant explains all:
• The General Financial Rules, 2005 are to be complied. • Utilization targets.
•Separate Bank account to be maintained.
• Target specified for utilization •Period for utilization • Audit by the C&AG • the Government Heads of Account to be debited. • Bank account of the appellant institution.11 12 ITA No. 1684/Kol/2017
ITO, E, W 1(1) Kol Vs. Central Tool Room & Training Centre, Kolkata •Sanction of the release by the Integrated Finance Wing (under the Ministry of Finance) • Endorsement of the letter to various concerned Govt. Department: Accountant General, etc.
8.3 Fundamental basic point to be made here is the Grant is government fund. It is subjected to Government rules, procedure, sanction, and audit. The entire machinery of the Government of India have to comply to the General Financial Rules, 2005. So, the specific mention(s) of GFR provisions in the release letter itself.
8.4 Which reiterates my discussion at Para 7 preceding that the appellant institution being of the government, is not assessable to incometax at all in the first place.
8.5 Anyway, even that I have held that the appellant institution is not assessable to incometax at all in the first place and further too that the funds are government funds for specific target purpose, the appellant institution has utilized the grants the 'utilization certificate' to the Ministry as mandated under rule 212 of the General Financial Rules [GFR]. The utilization certificate in the GFR prescribed Form No. 19A, is hereunder:
12 13 ITA No. 1684/Kol/2017ITO, E, W 1(1) Kol Vs. Central Tool Room & Training Centre, Kolkata 13 14 ITA No. 1684/Kol/2017 ITO, E, W 1(1) Kol Vs. Central Tool Room & Training Centre, Kolkata
9. Such government grants are regular had been in earlier years, as also in subsequent years.
A pertinent point is that such government grants had been in earlier years, as also in later year obviously, as the appellant institution is a government institution.
I have gone through the Balance Sheet as on 31.03.2013, and, 31.03.2015, and such grants are there, and with the same accounting treatment.
So the same accounting treatment had been done in all the years crediting the grants directly to the Balance Sheet. It does not seem that the AO(s) had ever questioned the accounting treatment.
Per se, as regards the accounting treatment, I concur with the appellant. The government grant is not income. It is grant for specific target/ scheme use. Though it is not capital receipt in the strict sense, but it is Parliament voted specifically earmarked funds for specific target/scheme use. The Government Rules apply; not the Income Tax Act. The Funds are outside the purview of the Income Tax (save maybe for TDS provisions at the time of expending from out of the fund, if and where applicable).
10. When appellant being government institution is not liable to be assessable to incometax, the grants are government specific funds then how the impugned assessment, etc ...
The rootcause is obvious it is the Permanent Account Number [PAN].
The appellant institution had been established way back in the year 1978. But the grant' of registration u/s 12A was only until the year 2001; i.e., it had applied for registration u/s 12A only around the year 2001. The years around 2001 were the PANfever years. PAN had just been introduced with gusto and allout reach. PAN was compulsory to open Bank Account.
The appellant institution has to have bank account; more so, the Grants are to be credited to specific bank account.
So having got PAN the common perception is that, now that you are in the taxnet, and so you are to furnish return of income. So the appellant must have applied for registration u/s. 12A as a educational institution to get the exemption u/s.11. The registration was granted.
Things went fineuntil this impugned assessment order.
11. On the Grounds of Appeal, per se 14 15 ITA No. 1684/Kol/2017 ITO, E, W 1(1) Kol Vs. Central Tool Room & Training Centre, Kolkata Though I have suomoto held that the appellant institution is not liable to be assessable to incometax in the first place, being a government educational institution. I will hereunder briefly to through the Grounds of Appeal, and give my decision thereon. Ground No. Ground subject matter Decision/Remarks 1 General 2 ITO,AO treating the Allowed governmen6t grant as income .Government grant is no income.
The grant is Parliament voted grant out o the Consolidated Fund of India as per Article 113 of the Constitution of India.
.The grant is target use specific .The grant is subjected to the government financial rules.
.The grant is government fund.
The grant is not income u/s.
11(1)(a); nor is it contribution to corpus u/s, 11(1)(d) or 12(1).
.The grant is outside the scope of the Income Tax Act.
3 ITO, AO not allowing towards [As ground No. 2 above is Allowed, application out of the grant this ground becomes infructious.
Even so, the utilization should have been allowed.] 4 That the grants are 'capital Treated as Allowed grants'[As12] .Though in the strict sense, the grants are not per se so as to be 'capital grants' for the specified target use is for 'training of trainees' and 'units benefitted', but as the grants are not 'income', they cannot be credited through the I & E A/c and so so have to be credited directly to the Balance Sheet.
5. Utilization certificate the [same as in ground No. 3 above] application should have been allowed.
6 General savings ground 15 16 ITA No. 1684/Kol/2017 ITO, E, W 1(1) Kol Vs. Central Tool Room & Training Centre, Kolkata
7. The learned departmental representative vehemently contends during the course of hearing that the CIT(A) has erred in law as well as in facts in treating the assesse to be an 'person' within the meaning of section 2(31) of the Act thereby deleting the impugned addition of Rs.8,21,56,000/- as grant received from Govt. of India. The department seeks to reiterate that assessee has nowhere placed on record the donor's specific direction about utilization of the impugned sum as corpus fund. It therefore seeks to restore the impugned addition made by the Assessing Officer on account of non application of the impugned sum upto statutory limit of 85% u/s. 11 of the Act. The assesse on the other hand strongly supports the CIT(A)'s action deleting the impugned addition vide above extracting reasoning.
8. We have given our thoughtful consideration to the rival contentions. We find no merit in Revenue's instant arguments. The assessee admittedly is a training centre enjoying section 12A registration since 12-06-2001. It receives Govt. of India's grant as per specific directions. Copy of one such direction forms part of record vide letter dt. 10-06-2018 coming from Ministry of Micro, small & Medium Enterprises makes it clear that the grant in issue was to be utilized for creating capital asset in a given ratio. The impugned grant also came through the specified channel. This assessee's utilization activity is very well recorded as per Form 19A prescribed in GFR (General Finance Rules). Necessary utilization certificate to this effect dated 23-05-2014 has been taken into consideration. The CIT(A) has reproduced the same in his lower appellate order in preceding paras. We observe that in these peculiar facts the Revenue has failed to rebut that assessee's grant-in-aid had come with specific directions and the same has also been utilized as per prescribed purposes. It transpires during the course of hearing that Assessing Officer has accepted the very factual position in all preceding and succeeding assessment years. Coupled with this, various decisions/judicial precedents namely hon'ble Punjab & Haryana high court in ITA No. 210/ 11 CIT V/s. State Urban 16 17 ITA No. 1684/Kol/2017 ITO, E, W 1(1) Kol Vs. Central Tool Room & Training Centre, Kolkata Development Society decided on 9-10-1, the tribunal's orders Chief Administrator Rural Development Authority V/s. ACIT 2014 162 TTJ Chd. 749, ITA Nos. 505- 506/Pune 2014 Arunava V/s ITO decided on 22-5-2017 DIT V/s. Society for Development (2012) 205 TAXMANN hold that government grants do not acquire taxable income's status in such cases. We conclude in this peculiar facts and circumstances that the CIT(A) has rightly reversed the assessment findings making the impugned addition of Rs. 8.21 crores in issue on both counts.
9. This Revenue's appeal is dismissed.
Order pronounced in the Court on 10 -05-2019
Sd/- Sd/-
[ Dr. Arjun Lal Saini ] [ S.S.Godara ]
Accountant Member Judicial Member
Dated :10 -05-2019
**PRADIP, Sr. PS
Copy of the order forwarded to:
1. Appellant/Department: Shri Krishnendu Sengupta, ITO, W-1(1), Kol 10B, Middleton Row, 5th Fl., Kolkata-71.
2. Respondent/Assessee: M/s. Central Tool Room & Training Centre, Kolkata, Bonhooghly Industrial Area, Kolkata-108.
3..C.I.T(A).- 4. C.I.T.- Kolkata.
5. CIT(DR), Kolkata Benches, Kolkata.
True copy By Order
Assistant Registrar
H.O.O/D.D.O Kolkata
17