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TMI Blog2017 (9) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that:- when a transaction is between Government of India and Government of any foreign country or territory, FCRA is not attracted. When undisputedly, the transaction of 9,45,28,000/- is a grant given by French Government to the assessee society which is a joint venture of French Government and Government of India, the transaction of transferring the grants is a transaction between both the countries as specified in the letter (supra). Furthermore, vide letter dated 08.06.1985, available at page 28 of the paper book, addressed to Secretary General, Ministry of External Relations, Government of France by Shri Ramesh Bhandari, the then Foreign Secretary, it is categorically made clear that, “the assessee society established for promotion of scientific research etc. will be exempt from payment of income-tax.” So, in these circumstances, we find no illegality or perversity in the findings returned by ld. CIT (A) in deleting this addition by treating the assessee society as a Government society. - Decided against revenue Addition under the head ‘interest income’ u/s 13(1)(d) - deposits in the French bank violates the provisions of section 11(5) read with section 13(1)(d) - Held that: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and in the circumstances of the case and in law, the Ld. CIT(A) has erred in adjudicating that there is no violation of section 13(1)(d) of the Act 1961 in respect of interest of ₹ 8,849/- earned on investment made with Credit Industrial Commercial Paris, France, by the assessee in ignoring that investment was not made in conformity with section 11(5) of the Income Tax Act, 1961. 5. The appellant craves leave to add, to alter or amend any ground of appeal raised above at the time of hearing." 2. Briefly stated the facts necessary for adjudication of the controversy at hand are : the assessee society came into existence in 1986-87 and was registered under Society Registration Act, 1860 as a joint venture of Government of India and Government of France with object to promote scientific research in both the countries. Assessee society was earlier granted exemption under section 35(1)(ii) of the Income-tax Act, 1961 (for short 'the Act') as a scientific research institution but subsequently it was registered under section 12AA of the Act vide order dated 13.05.2004. Assessee society's income is exempt u/s 11(1)(c) as per approval granted by the Board up to AY 2009-10 and it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no violation of Section 13(1)(d) of the Act, 1961 in respect of interest of ₹ 8,849/- earned on investment made with Credit Industrial at Commercial Paris, France, by the assessee in ignoring that investment was not made in conformity with Section 11 (5) of the Income Tax Act, 1961. 4. On the facts and in the circumstances of the case and in law, Ld. CIT(A) has erred in admitting and adjudicating this ground in violation of Principle of Natural Justice in directing the AO to re-compute income on commercial principle. 5. On the facts and in the circumstances of the case and in law, Ld. CIT(A) has erred in making the observations that the assessee is a Government Society as there is no concept as Government Society as per the Societies Registration Act, 1860. 6. The order passed by Ld. CIT(A) is in violation of law as well as facts of the case. 7. The appellant craves leave to add, to alter or amend any ground of appeal raised above at the time of hearing." 7. Keeping in view the fact that the additional grounds sought to be raised by the assessee company, though not raised before the ld. CIT (A), are necessary for complete adjudication of the controversy at han ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the transactions not attracting provisions of FCRA. For facility of reference, letter (supra) is reproduced as under :- "NO……………………. Government of India/Bharat Sarkar Ministry of Home Affairs/Grih Mantralaya 1st Floor, NDCC-II Building, Jai Singh Road, Off. Parliament Street, Near Jantar Mandir, New Delhi - 110 001, Date : 2.01.2014 To Dr. Debapriya Dutta, Director, …….., 5B, Ground Floor, India Habitat Centre, Lodhi Road, New Delhi - 110003. Subject : Permission under Foreign (Regulation) Act, 2010 Sir, I am directed to refer to your letter dated 18 Sept 2013 on the subject mentioned above and to state that Foreign Contribution (Regulation) Act, 2010 does not attract in respect of the following transactions : a) Transaction between the Govt. of India and the Govt. of any foreign country or territory - Clause 51 of FCRA 2010. b) Bodies constituted or established by or under a Central Act or a State Act requiring compulsory auditing by C & AG Notification No. S. O. 1492 (E) dated 1 July, 2011. In view of above, it is required to examine the subject proposal. If the f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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