Answer
(Fatwa: 997/997/M=1431)
It is lawful if someone engraves the mosque for embellishment from his halal money except the wall of mihrab and qiblah. But it is makrooh to make designs in mihrab i.e. in the wall of qiblah; because it will divert the attention of those offering prayers. In the same way, it is makrooh to make delicate and floral designs out of affectation. However, it is not lawful to make such things from the income of waqf. The waqf money can be used only in the necessary constructions which make the mosque strong and stable:
Allah (Subhana Wa Ta’ala) knows Best
Darul Ifta,
Darul Uloom Deoband