TMI Blog1992 (5) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... e-tax Act, 1961." 2. These appeals arise out of the income-tax assessments of M/s. Ramalalji Dhapidevi Golchha Charity Trust, the assessee herein. The assessment years under appeal are 1986-87 and 1987-88 for which the previous years ended on 12-11-1985 and 31-10-1986 respectively. For these two years, the assessee filed ite returns on 22-2-1988 alongwith audited statements of accounts and Auditor's report in Form No. 10B. After examining the assessee's accounts, the the ITO held that the assessee-trust had violated the provisions of section 13(1)(d) read with section 11(5) of the IT Act, 1961 by investing/depositing its funds with M/s. W. H. Harton Co. Ltd. and, therefore, the assessee was not entitled to the benefit of exemption under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ealised from the debtor concern and that, therefore, it would be wrong to say that the assessee-trust had either made this investment or allowed the investment to continue as such. The Dy. Commissioner, therefore, held that there was no violation of the provisions of section 13(1)(d) of the Act by the assessee. He further relied on the fact that even for the assessment year 1985-86, the ITO had accepted the assessee's contention and granted exemption to the assessee-trust under section 11 of the Act on the identical facts and circumstances. The Dy. Commissioner, therefore, held that the assessee was entitled to get exemption under section 11 of the Act. Accordingly, he directed the ITO to allow benefit of such exemption under section 11 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained due and payable by the said company to the assignor, the details of which were set out in the schedule, that the said M/s. W.H. Harton Co. Ltd. paid only a sum of Rs. 10,000 to the assignor on 31-8-1982 leaving a balance of Rs. 2,30,748 with interest thereon at the rate of 15 per cent per annum upto 15-2-1982 and thereafter at the rate of 18 per cent per annum. The reason for making the assignment in favour of the assessee-trust is set out in the preamble of the assignment deed itself. The settlor had become old and was not in a position to take active part to realise any further amount from the said company. As he had created a charitable trust in the assessee-trust on 3-7-1979, he had assigned the said account balance due from M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee had not invested any of its funds in a prohibited asset. In my view, this decision of the Madras High Court fully supports the assessee's case. I may point out that his decision follows the decision of the Calcutta High Court in CIT v. Birla Charity Trust [1988] 170 ITR 150. I may further point out that the Finance (No. 2) Act, 1991 has inserted the following clause (iia) in section 13(i)(d) of the Act with retrospective effect from 1-4-1983 :-- " (iia) any asset, not being an investment or deposit in any of the forms or modes specified in sub-section (5) of section 11, where such asset is not held by the trust or institution, otherwise than in any of the forms or modes specified in sub-section (5) of section 11, after the expiry of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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