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TMI Blog2022 (6) TMI 1065X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be treated as income of the assessee-trust. In our opinion, the ratio of this decision of Hon'ble Gujarat High Court is squarely applicable to the facts of the present case and respectfully following the same, we uphold the impugned order of the learned CIT(A) a lowing the claim of the assessee that the government grant of Rs. 6,18,22,000/- received by the assessee-trust towards specific projects to achieve objects of the Trust constituted its Corpus Fund which was not chargeable to tax. - Appeal of revenue dismissed. Treating the capital expenditure as application of income - HELD THAT:- As decided in own case [ 2022 (3) TMI 1192 - ITAT AHMEDABAD] assessee is entitled to depreciation under Section 32 of the Act on assets whose cost has been allowed as application of income for charitable purpose under Section 11(1)(a) of the Act - Since the Assessment Year involved in the present year is AY 2014-15, we respectfully follow the decision of the Hon ble Supreme Court in the case of CIT Vs. Rajasthan Gujarati Charitable Foundation Poona.[ 2017 (12) TMI 1067 - SUPREME COURT] and direct the Assessing Officer to allow the claim of the assessee for deduction on deprec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nature and therefore the benefit of corpus fund will be eligible. 4. The facts in brief are that the assessee in the present case is a trust established with the main objective to provide facilities for testing, calibration and consultancy for achieving quality of electronic products and equipment including computers, communication equipment, instrumentation, process, control instruments and electrical equipment. The assessee-trust is duly registered u/s. 12AA of the Act. 5. The AO during the assessment proceedings found that the activities of the assessee are covered under 1 and 2 proviso of section 2(15) of the Act and therefore benefit of exemption u/s. 11 of the Act to the assessee is not available. Thus the AO treated the amount of Government Grant of Rs. 4,63,13,000/- as income and accordingly added to the total income of the assessee. 6. The aggrieved assessee preferred an appeal to the Ld. CIT(A), who held that the activities of the assessee are not covered under 1 and 2 proviso of section 2(15) of the Act. Therefore, the corpus fund received from the Government as a grant cannot be treated as income of the assessee. Thus, the Ld. CIT(A) reversed the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s at GJDC Electronic Estate, Gandhinagar and at Makarpura Industrial Estate, Vadodara. 11. It is noted that the assessee-trust is duly registered under Section 12AA of the Act and the nature of its objects being charitable is not disputed even by the Assessing Officer. He however held, by relying on the fact that the assessee-trust was charging fees for various services rendered, that it is engaged in the business activity and its case is covered by the provisions of Section 2(15) of the Act read with (i) and (i) proviso thereto. In this regard, the learned CIT(A) has relied on the decision of Hon'ble Delhi High Court in the case of Bureau of Indian Standards (supra) wherein it was held that even if the appellant was taking license fee for granting certification, it could not be said to be for the profit and if any profit or revenue is generated, the same was only incidental to the charitable activity mainly carried on by the assessee. It was held that the assessee, therefore, could not be said to have involved in carrying out any activity in the nature of trade, commerce or business. To the similar effect is the decision of Hon'ble Gujarat High Court in the case of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to form the corpus of the Trust and to be applied for such purpose, it was held by the Hon'ble jurisdictional High Court after considering the entire purport of the scheme that the grants made available to the assessee-trust for implementing the scheme in a particular manner cannot be treated as income of the assessee-trust. In our opinion, the ratio of this decision of Hon'ble Gujarat High Court is squarely applicable to the facts of the present case and respectfully following the same, we uphold the impugned order of the learned CIT(A) a lowing the claim of the assessee that the government grant of Rs. 6,18,22,000/- received by the assessee-trust towards specific projects to achieve objects of the Trust constituted its Corpus Fund which was not chargeable to tax. Ground No. 1 of the Revenue's appeal is accordingly dismissed. 10.1. Before us, no material has been placed on record by the Revenue to demonstrate that the decision of Tribunal as discussed above has been set aside/stayed or overruled by the higher Judicial Authorities. Before us, Revenue has not placed any material on record to point out any distinguishing feature in the facts of the case for the year u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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