2008 (12) TMI 264

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....vention of s. 11(5) of the IT Act, 1961 (hereinafter called 'the Act'). 3. We have heard the rival submissions in the light of the material placed before us and the precedents relied upon. During the relevant period the assessee did claim the exemption under s. 11 of the Act. The assessee was required to invest the funds as per the modes stipulated under s. 11(5) of the Act. It was noticed that the assessee made investment to the tune of Rs. 50 lakhs in M/s Egmore Benefit Fund Society Ltd., 13, Flowers Road, Chennai-84, a concern in which the managing trustee of the assessee and his relatives were directors. Since this investment was not covered by the modes stipulated under s. 11 (5). the AO denied the claim for exemption and made the i....

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....sult of this attachment the assessee trust failed to withdraw the sum of Rs. 50 lakhs. Ex consequenti it could not be reinvested as per the modes prescribed under s. 11(5) of the Act. 6. While renewing the exemption under s. 80G the CIT had directed the assessee trust to make efforts with the concerned TRO for lifting of the garnishee order so that the sum of Rs. 50 lakhs could be withdrawn from M/s Egmore Benefit Fund Society Ltd. and reinvested in specified securities. The assessee approached the TRO dealing with the case of M/s M.G. Enterprises. It was ascertained that the outstanding taxes were Rs. 7,82,762 representing interest under s. 220(2) of the Act. In its own interest the assessee trust volunteered to pay this amount on 13th ....