Y.R. Meena, J. - (1.) By this reference application, the Tribunal has referred the following two questions for our opinion : "Question raised in R. A. No. 21 (Cal) of 1988 : Whether, having regard to the fact that the assessee had income from the shares of a company in which the donor of the said shares had substantial interest within the meaning of Section 13(2)(h) read with Section 13(l)(c) of the Income-tax Act, 1961, the Tribunal was correct in law in holding the provisions of Section 13(2) of the said Act were not attracted ? Question raised in R. A, No. 22(Cal) of 1988 : Whether, on the facts and in the circumstances of the case and on a proper interpretation of Section 2(15) of the Income-tax Act, 1961, the Tribunal is correct in law in holding that depreciation claimed in the accounts by the assessee was an outgoing for the purpose of determination of income in terms of Section 11(1) of the Income-tax Act, 1961, and in that view deleted the addition so made in this regard ?"
(2.) The assessee is a trust. The trust received donation to the extent of Rs. 18,11,134 during the accounting year ending June 30, 1982. Such donation includes shares of the face value of Rs. 14,00,000 of Transport Corporation of India Limited (1,40,000 equity shares of Rs. 10 each), received from Shri Prabhu Dayal Agarwal and Chogmal Agarwal on August 28, 1981. The Income-tax Officer found that the donors had substantial interest in Transport Corporation of India Limited within the meaning of Section 13(2)(h) of the Income-tax Act. Therefore, the Income-tax Officer invoked the provisions of Section 13(4) and brought to tax the dividend income derived by the trust of Rs. 1,68,000.
(3.) In appeal, the Commissioner of Income-tax (Appeals) found that the donation of shares does not amount to investment by the assessee for acquisition of shares. Therefore, the provisions of Section 13(2)(h) of the Act are not attracted.;