Case Law Details
State Health Society Assam Vs ITO (ITAT Kolkata)
ITAT Kolkata held that gross receipts cannot be taxed entirely, estimated expenditure incurred by the society for earning this income needs to be allowed even if the society is not registered under section 12A of the Income Tax Act.
Facts- The assessee is a Society. It is engaged in implementing various Schemes of the Government of India and State Government of Assam on health for which it gets grant-in-aid, Scheme-wise. The assessee had not filed its return of income. Therefore, a survey under section 133A was carried out at the premises of the assessee.
A perusal of the assessment order revealed that there are three categories of income in the hands of the assessee, namely grant-in-aid; (interest on the surplus of the above granting-aid deposited in the Banks, etc.; and Other income comprising of sale of bidding documents and miscellaneous receipts.
As far as the first two categories of income is concerned, AO observed that this is a grant given by the Government for specific implementation of the projects. Thus, the assessee was required to act upon specific directions of the State Government as well as the Government of India. Thus, none of the said income was taxed.
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