1996 (9) TMI 94

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....a, in favour of the assessee ? Is not the reasoning of the Appellate Tribunal to hold so illegal and unjustified ? 2. Was the Appellate Tribunal justified in holding that the assessee- appellant is not entitled to the exemption under section 11 of the Income-tax Act, 1961, in the instant case ? 3. Was the Appellate Tribunal right in holding that in the case of the assessee a partner in the firm there is investment of funds by the assessee in a concern within the meaning of section 13(2)(h) and section 13(3) of the Income-tax Act, 1961 ? " In fact, the main question is whether reopening under section 147(a) of the Income-tax Act is justified on the facts and circumstances of the case ? The assessee-Sree Narayana Chandrika Trust, ....

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....tion itself during the original assessment proceedings. There was, therefore, justification to resort to section 147(a) of the Act. It was contended on behalf of the assessee that this was within the knowledge of the Income-tax Officer during the original assessment proceeding itself. Factually, the assessee-trust had contributed Rs. 5,000 towards the capital of the firm, Beena Enterprises. The said firm had a total investment of Rs. 30,000. Therefore, the contribution was more than 16 per cent. of the total investment. The Tribunal further found that along with the return from the document (annexure " H " thereto) the assessee had stated that with reference thereto that " list will be furnished ". Such a list was not submitted. The T....

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..... The Tribunal, in this context, emphasised the factual peculiarity that the contribution towards the Chandrika Educational Trust (Rs. 100) was far below 5 per cent. of the total capital contribution. The contribution of Rs. 5,000 by the assessee trust in the firm of Beena Enterprises exceeded the required five percent age as the said contribution was more than 16 per cent. Thus, on the factual matrix, the reasoning of the Tribunal will have to be justified under the above situation. Apart therefrom, in I. T. R. Nos. 31 of 1990 and 145 of 1994, decided on July 4, 1996 (Chandrika Educational Trust v. CIT [1997] 224 ITR 453) this court (of which one of us-myself--was a partner dictating the judgment), with regard to the situation in the....