TaxTMI 
TaxTMI 
2012 (8) TMI 494
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.... The assessee has total corpus fund of Rs.21,60,00,000/- as per the accounts as under : Investment in unquoted equity shares Rs.5,55,68,550/- Investment in quoted equity shares Rs. 1,60,000/- Investment in convertible debentures Rs.1,79,83,900/- Rs.7,37,12,450/- The balance corpus fund along with the retained earnings of Rs.1,28,21,680/- has been either invested in deposit account or current account along with advances etc. Out of the corpus fund of Rs.21.60 crores the assessee has invested only part amount and the balance amount has been kept bank on which interest of Rs.96,61,421/- has been earned by the assessee fund. After deducting the business loss of Rs.26,65,471/-, net income of Rs.69,95,950/- wa....
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....above provision in the present case. The relevant para containing the directions of the ITAT is reproduced as under: "9. We see substance in Shri Bhatt's plea. The expression 'investible funds' is a neatly defined expression under Rule 2(hh) and it connotes corpus net of expenses for administration and management of funds. To arrive at investible funds, therefore, trust management and administration expenses are to be reduced from the corpus amount. The CIT(A), thus, was clearly in error in his computations extracted earlier in his order. We deem it fit and proper to remit the matter to the file of the CIT(A) for the limited purpose of verifying investment pattern vis-àvis investible funds computed in the light of the ab....
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....,474.61 935.80 6,410.41 209,589.59 135,507.84 64.65 31.3.2007 168,000.00 5,583.31 836.83 6,420.14 161,579.86 368.20 111,639.29 69.09 31.3.2008 168,000.00 5,582.92 1,024.08 6,607.00 161,393.00 368.20 111,639.29 69.17 6. In this background it was submitted on behalf of the assessee that position regarding investible funds was accepted by the CIT(A)-II, Pune, in assessee's own case while disposing off the appeal filed for A.Y. 2005-06 and 2006-07, and the above working is same working as was submitted during appellate proceedings before CIT(A)-II, Pune, for above mentioned assessment years. It was further pleaded that having achieved stipulated percentage of inve....
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.... for administration and management of the fund. The term 'equity linked instruments' is defined by SEBI Regulation 2(ee) to include instruments convertible into equity shares or share warrants, preference shares, debentures compulsorily [or optionally] convertible into equity. Accordingly, it has been explained by the assessee that when management and administration expenses as per Profit and Loss Account are reduced from the corpus of Rs.21.60 crores, the net figure of Rs.20,95,19,760/- becomes the Investible funds for the purpose of Regulation 12(d)(i). Therefore, considering the investment of Rs.14,02,99,580/- in the prescribed Venture Capital Undertaking (other than quoted equity shares), the investment percentage arrived at is 66.96%, ....
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....on, is erroneous to the extent that the term 'investible funds' has not been examined and wrongly considered to mean the corpus, whereas, in fact the term 'investible funds' have been defined under SEBI regulations in regulation (hh) as 'investible funds' means corpus of the fund net of expenditure for administration and management of the fund;' and taking into consideration the same if the working is made as has been done herein above, it can be seen that the assessee had already achieved the conditions prescribed." 5.3. On going through the appellate order No.PN/CIT(A)- II/DCIT.Cir.6/773/2006-07, of the CIT(A)-II, dated 02.11.2007 it is noticed that the appellant's contention is correct. In the CIT(A)'s order also the prescribed percen....
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....Capital Fund was exempt subject to the prescribed conditions. Following this decision of CIT(A)-II for the Assessment Year 2004-2005, it is held that the exemption u/s.10(23FB) is available to any income of the assessee, be it interest, dividend, etc. The grounds of appeal Nos.5 and 6 are, therefore, allowed." 8. From this it was observed by CIT(A) that above observation of CIT(A) for A.Y. 2005-06, the prescribed percentage of 66.67% of the investible funds have been achieved during the previous year relevant to the A.Y. 2005-06 and therefore, condition laid down under Regulation 12(d)(1) of the SEBI Regulations is also satisfied in the case of the assessee. In view of this categorical finding of the CIT(A) for immediately succeeding yea....