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TMI Blog2013 (7) TMI 811X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant has raised the following substantial questions of law for consideration of the Court:- "i. Whether the Hon'ble ITAT was justified in law and on facts in holding that the source of loan given by the assessee to Ram Lakhan Shiksha Samiti was from the funds included in accumulated funds proposed to be utilized for the purposes of section 11 (5) of the Act. Therefore, the funds which were set aside for the purposes as per section 11 (2) could only be utilized in the manner provided in section 11 (5) of the Act. ii. Whether the Hon'ble ITAT was justified in law and on fact in holding that at the relevant time, no registration under section 12AA of the Act was available to the recipient society in the Financial Year in which the loan wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 11 (2) of I.T. Act. Since the assessee had advanced loan of Rs.1.28 crores in F.Y. 2002-03, the advance could only be given out of funds which includes accumulated balances over the above 25% under section 11 (2) of the Act. The assessee had made advance of Rs.1.28 crores to M/s Ram Lakhan Shiksha Samiti, and Rs.1,00,000/- to Subhash Degree College out of its accumulated balance which included the funds accumulated u/s 11 (2) apart from the funds available upto 25% of its income. The funds continued to be lent from F.Y. 2002-03 till the end of the year under consideration. 7. Shri Ram Lakhan Bhatt is founder trustee and Manager of the assessee trust as well as that of M/s Ram Lakhan Shiksha Samiti to which the loans were advanced. 8. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) in which it was held as follows:- "that the interest-free loan of Rs.90,50,000 given by the assessee-society to the other society did not violate section 13 (1) (d) read with section 11 (5) of Act, 1961 as the loan was neither an "investment" nor a "deposit". Moreover, both societies had similar objects and were registered under section 12A of the Act and had approvals under section 80G. The fact that the loan was interest-free and had been subsequently returned was also significant." 11. The ITAT thereafter observed that total expenditure of the assessee were Rs.1,55,49,885/- and the total receiving were Rs.2,34,38,260/-. The excess of income over expenditure was at Rs.21,11,624/-, which was less than 15% of the gross receipts and thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as given between 20th Feb. to 24th Feb. 2003 and was repaid in the year 2009 and further the amount was given by way of loan to a society, which was later on registered under Section 12A w.e.f. 1.4.2004 to 25.5.2005, with the same objects and purpose as that of the assessee. 14. It was held in Mansa Ram & Sons v. Janki Dass Om Prakash & Ors., AIR 1984 All. 267 that the term loan and deposit are not mutually exclusive. The test is whether on the admitted facts of the case there was an allegation on the debtor to seek out the creditor and repay him or whether he was to keep the money till the creditor asks for the same. The case of deposit is something more than a mere loan of money. It depends on the facts of the each case whether the trans ..... X X X X Extracts X X X X X X X X Extracts X X X X
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