Exemption under s 11

The assessee a Government-owned Corporation established for the purpose of upliftment of Safai Kamdars and certain members of Scheduled Caste is entitled to benefit of s 11 even if certain grant is received from Government for specific purpose but purpose not stated expressly to set up a corpus fund — as held by GujHC in CIT v Gujarat Safai Kamdar Vikas Nigam — In favour of: The Assessee ; Tax Appeal No. 1934 of 2009

Detailed provisions were made for allotment of funds to the respondent-assessee. It was a scheme envisaged for implementation of certain Government programmes in particular, to uplift the living condition of manual scavengers and other Safai Kamdars involved in similar activities. Though exact words may not have been used that the funds made available are directed to form the corpus of the Corporation and to be used for such purpose, the entire purport of the scheme has to be gathered from the reading of the scheme as a whole. If so done, it leaves no doubt in our mind that the funds were made available to the Corporation for implementing the scheme in a particular manner. The assessee-corporation was not the sole trustee. The Scheduled Caste Development Board was also liable for implementation of the scheme to be supervised by a Committee headed by the Deputy Minister which included other Government officials. The Tribunal committed no error in holding that the grant in question fulfils the requirement of s 11(d)(1) read with s 12(1) of the Act.

Decided on: 2 May 2011