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TMI Blog2018 (5) TMI 1730X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 on 06.08.2015, framed the following substantial questions of law:- (I) Whether on the facts and in the circumstances of the case the learned ITAT was correct in holding that the tax at margin rate as per the provisions of Section 164(2) is to be levied on the income earned from non-exempt asset? (II) Whether on the facts and circumstances of the case more holding of ineligible assets is sufficient to attract the provisions of Section 13(1)(d)(iii) of the Act and it is immaterial whether funds of the trust were used or not?" 4. This court while admitting the Income Tax Appeals No.130/2015 & 140/2015 on 24.07.2017, framed the following substantial question of law:- "Whether on the facts and circumstances of the case and in law, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ances of the case and in law, the Ld. ITAT was correct in quashing the revision order passed u/s 263 by holding it as neither erroneous nor prejudicial to the interests of revenue? 2. Whether, on the facts and in the circumstances of the case and in law, the Ld. ITAT was correct in holding that the issue of applicability of Section 13(1)(d)(iii) was settled in favour of respondent assessee vide its own order, notwithstanding that the said order has already been challenged before this Hon'ble Court and the appeal is pending adjudication as on date? 3. Whether on the facts and in the circumstances of the case the Hon'ble ITAT was correct in holding that the denial of exemption u/s 13(1)(d)(iii) is to be restricted to only the inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on'ble Court?" 8. The facts of the case are that the assessee filed its return of income on 30.9.2008 declaring Nil income. The assessee is a Trust and runs a hospital namely Santokba Durlabhji Memorial Hospital cum Research Institute. The case of the assessee was picked up for scrutiny and an order u/s 143(3) was passed on 27.12.2010 determining the total income of the assessee as Rs. 6,23,44,980/-. Respondent is a trust where they received gift of TISCO Ltd. shares which were subsequently written off. 9. The Tribunal while considering the matter in para 4.2 observed as under:- 4.2 ld. CIT (DR) contends that I. Assessee Consciously violated the statutory provision of continuing with the investment of shares in a non public sector ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on was not necessarily by way of bonus shares. The assessee had grossly ignored the phrase "by way of bonus" while st4ressing on the definition of word "accretion" the statute has allowed accretion only by way of bonus shares and that too in cases when such shares were with the trust on 1st July, 1973. When the shares are forming part of corpus after 1st June, 1973, question of accretion does not even arise. Clearly the investment in right-issue cannot, by any stretch of imagination, by equated with the phrase accretion by way of bonus shares. Ld. DR in order to buttress his arguments relied on following judgments:- i. CIT v. Kumudam Endownments 242 ITR 159 (Mad.) ii. DIT (E) v. M. Ct. Muthiah Cheetiar Family trust. iii. DIT(E) v. S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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