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2014 (7) TMI 909 - HC - Income TaxExemption u/s 11 and 12 – Investment being 5% - Whether the Appellate Authorities were correct in holding that the investment made would be less than 5% of the capital of the assessee if the borrowed amount is treated as capital and the investment is made in furtherance of the objective of the Trust and exemption u/s 11 and 12 should be granted – Held that:- If the funds invested in a concern in which any person referred to in section 13(3) has substantial interest, does not exceed 5% of the capital of that concern, the exemption u/s 11 and 12 of the Act shall not be denied - The word used is 'Capital' of the concern, the word 'Capital' has not been defined under the Act. Relying upon Commissioner of Wealth Tax Vs. Lallubhai Gordhandas Charitable Trust [1999 (9) TMI 85 - GUJARAT High Court] - especially while granting the benefit to the charitable institution, when the legislature consciously provided for the funds of the Trust by way of investment and they have fixed a limit of 5%, by placing an interpretation which is contrary to the expressed words, benefits cannot be denied to the assessee - computation is to be made for investment by charitable trust - The word "capital" of the concern should be understood as the total capital of the concern - Both the Tribunal and the Appellate Authority were justified in holding that the capital of the concern with regard to a company cannot be considered as only a share capital – no substantial question of law arises for consideration – Decided against Revenue.
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