TMI Blog1993 (9) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... d Mfg. and Calico Ptg. Co. Ltd. 1,01,890 -------------- 1,31,370 -------------- Before the Tribunal, it was not disputed that 779 shares of Sercon Private Limited and 222 shares of Karmchand Premchand Private Limited were received in donation. It was also not disputed that 2,827 shares of Calico Mills Ltd. were bonus shares, 2,696 shares were received in donation and 137 shares were purchased. The Tribunal negatived the contention of the assessee that the assessee and the persons referred to in sub-section (3) of section 13 had no voting power because the shares owned beneficially by them did not carry 20 per cent. of the voting power. However, the Tribunal held that the assessee should succeed on the alternative argument that 40,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of the dividend was not forfeited? 3. Whether the assessee was entitled to exemption of the dividend income amount of Rs. 1,31,370?" At the time of hearing of this reference, the learned advocate for the applicant has submitted a statement, wherein it is, inter alia, stated that, in view of the decision of this court in the case of CIT v. Insaniyat Trust [1988] 173 ITR 248, if a trust received as donation some shares, then the provisions of section 13(2)(h) would not be applicable and the dividend received from the shares by the assessee was entitled to exemption. It is also stated that, in view of the aforesaid decision, the total dividend income of Rs. 1,28,094 cannot be taxed by applying the provisions of section 13(2)(h) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted in any particular property or business or transaction with the object of earning profit or financial advantage or return. It has to be established that a trust having assets in the form of money or cash or a credit balance in the bank account or in any other form capable of being invested was, by a positive act and pursuant to a decision of the trust, laid out or committed in a concern of a nature specified, before it can be held that such an investment comes within the mischief of section 13(2)(h). The court further held that section 13(2)(h) will be attracted only in cases where funds, that is, moneys from actual or available money or cash resources of the trust itself are invested or continue to remain invested for any period during ..... X X X X Extracts X X X X X X X X Extracts X X X X
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