Trust exemption and section 13 bar: factual findings on secured loan and adequate interest upheld, preserving exemption under sections 11 and 12.

A trust's exemption under sections 11 and 12 was examined in the context of a deposit or loan transaction with a concern in which a trustee had substantial profit-sharing rights. The Tribunal's findings that the loan was adequately secured and that the interest charged was adequate were treated as findings of fact, and, because they were not shown to be unsupported by material, they bound the Court in section 256(2) proceedings. On that basis, section 13 was found inapplicable and the trust remained entitled to exemption under sections 11 and 12.

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Issues: Whether the assessee-trust was hit by the bar under section 13 on account of the deposit/loan transaction with a concern in which a trustee had substantial profit-sharing rights, and whether it remained entitled to exemption under sections 11 and 12.

Analysis: The Tribunal had recorded findings that there was no evidence that the loan was inadequately secured and that the interest charged was adequate on the facts. Those findings were treated as findings of fact and, in the absence of any challenge that they were unsupported by material, they were held to bind the Court in proceedings under section 256(2).

Conclusion: The provisions of section 13 were held inapplicable and the assessee-trust was held entitled to exemption under sections 11 and 12.

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