Abraham P. George, Accountant Member - In this appeal filed by the assessee, its grievance is that it was denied exemption under Section 11 of Income-tax Act, 1961 (in short 'the Act') for a reason that it had violated Section 11(5) by subscribing to certain chits.

2. Facts apropos are that assessee, a Trust registered under Section 12AA of the Act, running educational institutions, had filed its return for impugned assessment year, inter alia, claiming exemption under Section 11 on its total income of Rs. 6,24,91,961/-. During the course of assessment proceedings, it was noted by the Assessing Officer that assessee had placed Rs. 2,08,456/- with one M/s Tern Credits & Chits Private Limited and Rs. 96,230/- with one M/s K.R. Palaniappan (Chit), during the relevant previous year. As per the A.O., these were not approved investments under Section 11(5) of the Act. Hence it resulted in violation of the nature specified in Section 13(1)(d) of the Act. Therefore, according to her, excess of income over expenditure of the Trust had to be taxed in the status of AOP. Though the assessee asserted before the A.O. that decisions of Hon'ble Bombay High Court in the case of DIT(E) v. Seth M