TMI Blog2000 (11) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... e relates to the assessment year 1990-91. The factual position in a nut shell is as follows : The assessee-trust had received premium amounting to Rs. 20,72,500 on leasing a plot of land to Dr. Sachdeva (P) Limited out of the land settled in its favour, measuring 2.77 acres, for a period of 99 years. This amount was duly reflected in the balance-sheet. The Assessing Officer found that the amount was invested in time deposit with the bank and this, according to him, did not constitute investment in a capital asset. It was, therefore, concluded that the assessee had infringed the provisions of section 11(5) of the Act and was not entitled to any exemption. The matter was carried in appeal by the assessee before the Commissioner of Income-ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal by the Revenue. The Commissioner of Income-tax (Appeals)' views were accepted by the Tribunal. Learned counsel for the Revenue submitted that investment in term deposits was not sufficient compliance with the requirements of section 11(5) of the Act. We find no substance in the plea of the Revenue. Section 11 deals with income from property held for charitable or religious purposes. Sub-section (1) of section 11 provides that subject to sections 60 to 63, enumerated incomes shall not be included in the total income of the previous year of the person in receipt of the income. Sub-section (2) deals with accumulation or setting apart either in full or in part seventy-five per cent. of the income referred to in clause (a) or ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st in part only for such purposes, the trust having been created before the commencement of this Act, to the extent to which such income is applied to such purposes in India ; and, where any such income is finally set apart for application to such purposes in India, to the extent to which the income so set apart is not in excess of twenty-five per cent. of the income from such property (c) income derived from property held under trust --- (i) created on or after the 1st day of April, 1952, for a charitable purpose which tends to promote international welfare in which India is interested, to the extent to which such income is applied to such purposes outside India, and (ii) for charitable or religious purposes, created before the 1st d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mediately following the previous year in which the income was derived as does not exceed the said amount, may, at the option of the person in receipt of the income (such option to be exercised in writing before the expiry of the time allowed under sub-section (1) of section 139, for furnishing the return of income), be deemed to be income applied to such purposes, during the previous year in which the income was derived ; and the income so deemed to have been applied shall not be taken into account in calculating the amount of income applied to such purposes, in the case referred to in sub-clause (i), during the previous year in which the income is received or during the previous year immediately following, as the case may be, and, in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction (2) shall be the following, namely : (i) investment in savings certificates as defined in clause (c) of section 2 of the Government Savings Certificates Act, 1959 (46 of 1959), and any other securities or certificates issued by the Central Government under the Small Savings Schemes of that Government ; (ii) deposit in any account with the Post Office Savings Bank ; (iii) deposit in any account with a scheduled bank or a co-operative society engaged in carrying on the business of banking (including a co operative land mortgage bank or a co-operative land development bank). Explanation.---In this clause, 'scheduled bank' means the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955), a subsidiary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o held, then, the appropriate fraction of the capital gain arising from the transfer shall be deemed to have been applied to charitable or religious purposes to the extent specified hereunder, namely :--- (i) where the whole of the net consideration is utilised in acquiring the new capital asset, the whole of the appropriate fraction of such capital gain ; (ii) in any other case, so much of the appropriate fraction of the capital gain as is equal to the amount, if any, by which the appropriate fraction of the amount utilised for acquiring the new asset exceeds the appropriate fraction of the cost of the transferred asset. Explanation.---In this sub-section,--- (i) 'appropriate fraction' means the fraction which represents the extent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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