Assessee is a Board established by Central Government to act as a nodal agency in developing activities of fisheries among various states in country.  Major source of receipt was grants from Central Government, and outflow was utilization of grants for projects developed by respective State Governments which were supervised by assessee. Assessee based on stage of completion of project released grants to State Government.  Assessing Officer, held that the  assessee did not utilise 85 per cent total grants-in-aid received during year and funds received back as refunds from various projects during year.He was of view that assessee had invested in equity shares of SDMSSL and thereby had contravened provisions of section 13(1)(d) read with section 11(5).  Accordingly, he taxed shortfall in application of income below 85 per cent of total income of trust Commissioner (Appeals),held that on an incorrect appreciation of accounting policies followed by assessee, Assessing Officer had rejected books, without actually bringing on record any defect in audited accounts of assessee and, therefore, he allowed claim of exemption under section 11.  It was observed that assessee had maintained books of account, bills, vouchers and all other requisite supporting documents in respect of grants received, spent and other activities.  Such books were audited by independent auditors-Assessee had been following accounting procedure as defined in GFR 230(5) of Government of India and directions of Integrated Financial Division of Ministry of Agriculture, Government of India (IFD) over years and treating all grans as liabilities and only when grants were utilised by implementing agencies they were treated as income and when utilisation certificates were received, they were treated as expenditure irrespective of year in which grant was received, as per directions of Government of India. There was no income element on grant of funds by Central Government, nor any expenditure incurred merely by allocation. Assessee had spent 85 per cent of income for objectives.  Further, such an investment was made in SDMSSL, in financial year 2008-09 and not during current year and never in earlier years any objection on that aspect was taken. Order of CIT(A) is affirmed. (AY. 2015-16)