TMI Blog2013 (7) TMI 811X X X X Extracts X X X X X X X X Extracts X X X X ..... mething more than a mere loan of money. It depends on the facts of the each case whether the transaction is clothed with the character of deposit of money - Where both the societies have similar objects and are registered under Section 12AA and have approvals under Section 80G, interest free loan cannot be treated as deposit or investment so as to attract Section 11 (5) of the Act - Following decision of Director of Income-Tax (Exemption) v. Acme Educational Society[2010 (7) TMI 159 - DELHI HIGH COURT] and Mansa Ram & Sons v. Janki Dass Om Prakash & Ors.[1984 (4) TMI 251 - ALLAHABAD HIGH COURT] - Decided in favour of assessee. - Income Tax Appeal No. - 171 of 2011 - - - Dated:- 16-7-2013 - Hon'ble Sunil Ambwani And Hon'ble Surya Prakash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd denied the benefit of Section 11 of the Act on the loan amount of Rs.1,28,06,709/- given by the assessee society to another educational society namely Ram Lakhan Shiksha Samiti. The A.O. held that though the amount given as loan is less than 15% of the income over expenditure, since the amount was not deposited in any of the securities mentioned in Section 11 (5), no allowance can be given for such amount. 5. Brief facts giving rise to this income tax appeal are that the assessee is registered under Section 12A of the I.T. Act and is running an education institution in the name of schools: (i) Subhash Institute of Software Technology (ii) Subhash Balika Inter College (iii) Subhash Public School. 6. The assessee gave loans to Ram Lakh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. The CIT (A) after considering the submissions held that the words in Section 11 are clear and unambiguous. The exemption is available only if money is invested or deposited in the modes specified. Section 11 is in two parts namely (i) that the accumulated funds have to be used by the trust in a manner which amount is "invested' or 'deposited", and (ii) such amount invested or deposited is in the specified form or modes given in Section 11 (5). In case of failure to adhere the either of the conditions, the exemption will not be available. In this case the CIT (A) held that the A.R. has admitted that giving loan is not the same thing as investment or deposit. In giving loan there has been a clear violation of the provisions in limine. E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 i.e. in the period relevant to the assessment year 2003-04. The ITAT further found that the provisions of Section 13 (1) (d) of the I.T. Act, which have been invoked by the AO were not applicable to the facts of the assessee's case. The assessee neither invested the amount nor deposited the same otherwise than in any one of the forms or modes specified in sub-Section (5) of Section 11 because the loan is neither an investment nor a deposit as held in Director of Income Tax (Exemption) v. Acme Educational Society (Supra) and accordingly provisions of Section 13 (1) (d) are not applicable. The appeal was allowed. 12. Shri R.K. Upadhyay, learned counsel for the revenue submits that the loan is also in the nature of deposit or investment. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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