Meaning of “Invested”

Case Name : Cit Vs. Birla Charity Trust

Citation :[1987] 34 TAXMAN 504 (CAL.)

Court : Kolkata High Court

Section : 13

Meaning : The expression ‘invest’ in section 13(2)(h) connotes a positive act on the part of the trust whereby the funds of the trust are laid out or committed in any particular property or business or transaction with the object of earning a profit or financial advantage or return.

Case Name : CIT/Cwt Vs. Polisetty Somasundaram Charities

Citation :[1990] 183 ITR 377 (AP)

Court : Allahabad High Court

Section : 13

Meaning : The expression ‘invest’ in a broad sweep takes in lending also, but it can be considered as confined to laying out the amount in a venture or institution with a profit motive and with no promise of assured return.

Case Name : CIT Vs. Sir Shri Ram Foundation

Citation :[2001] 116 TAXMAN 113/250 ITR 55 (DELHI)

Court : Delhi High Court

Section : 13

Meaning : The expression ‘invest’ connotes a positive act on the part of the trust whereby the funds of the trust are laid out or committed in any particular property or business or transaction with the object of earning a profit or financial advantage or return; what is contemplated is that the trust must be having assets in the form of money or cash or balance in a bank or any other form capable of being invested or by a positive act, and, pursuant to a decision of the trust, they were laid out or committed in a concern of a nature specified before it can be held that such an investment comes within the mischief of section 13(2)(h). The word ‘investment’ means to lay out money in business with a view to obtain income or profit. In order to constitute same the amount laid down should be capable of resulting in an income or return or profit to the investor and in every case of investment, the intention and positive act on the part of the investor should be to earn such income, return or profit to the investor. In order to constitute an investment, the money shall be laid out in such a manner so as to acquire some species of property which brings in an income to the investor. An investment popularly means every application of money which is intended to fetch return by way of interest income or profit. Section 13(2)(h) requires that the funds of the trust are, or continue to remain, invested in any concern of the nature mentioned therein.

Case Name : CIT  Vs. Calcutta National Bank Ltd.

Citation :[1959] 37 ITR 171 (SC)

Court : Supreme Court

Section : 13

Meaning : The word ‘investments’ is a word of large import. In one sense, every mode of application of one’s money intended to yield a return by way of interest, income or profit is investment.