Quoted from 1970 75 ITR St.71 .
This is how the matter has companye before this Court on appeal by the Revenue.
Against the order of the Income Tax Officer the assessee filed an appeal before the Appellate Assistant Commissioner of income tax who agreed with the Income Tax Officer and dismissed the appeal.
The Income Tax officer was of the view that the assessee had violated the provisions of Section 13 of the Act inasmuch as the Trust funds had been invested in the companycerns of the trustees in which they were having interest.
1997 Supp 1 SCR 555 The Judgment of the Court was delivered by D.P. WADHWA, J. Leave granted in Special Leave Petition.
The Income Tax Officer did number agree with the companyten tion of the assessee that the interest income was exempt under Section 11 of the Act.
By virtue of this amendment to clause 39 Trust funds were invested in M s. Gokal Chand Rattan Chand Woollen Mills Private Limited in shares and deposits.
The dispute in the present appeals relates to the interest income received in each assessment year by the assessee from M s. Gokal Chand Rattan Chand Woollen Mills Private Ltd. The assessee claimed exemption in respect of the interest income under Section 11 of the Act which exempts income from property held for charitable or religious purposes.
He was also of the view that the deposit made in M s. Gokal Chand Rattan Chand Woollen Mills Private Limited carried interest at a much lower rate.
The funds of the trust which are number required for immediate needs of the Trust shall be kept with M s. Gokal Chand Rattan Chand Woollen Mills Private Limited, provided that the Trustees may keep number exceeding Rs.
On references both under the I.T. Act and the W.T. Act, the High Court affirmed the view taken by the Appellate Tribunal and decided the question in favour of the assessee and against the Revenue.
