Where the assessee-society invested in shares of a private limited company and none of its office bearers individually held or controlled substantial interest in the said company, section 13(2)(e) was not applicable in respect of such investment.

2. (2026) 183 taxmann.com 409 (Del Trib)

Jan Kalyan Samiti vs. ITO

A.Y.: 2015-16

Date of Order: 06.02.2026

Section: 13(2)(e)

Where the assessee-society invested in shares of a private limited company and none of its office bearers individually held or controlled substantial interest in the said company, section 13(2)(e) was not applicable in respect of such investment.

FACTS

The assessee-society was granted registration under section 12AA in 2004. It filed its return of income for AY 2015-16, declaring Nil income. During the year under consideration, it had purchased 115,000 shares of M/s. RFCPL at Rs.60 per share for an aggregate consideration of Rs.69,00,000. Its case was selected for limited scrutiny under CASS on the grounds that it had undertaken transactions with specified persons. Upon perusal of the list of shareholders of RFCPL produced under section 133(6), the AO contended that Mr. SA (President of the society) held 25.84% voting power in RFCPL through SA(HUF) (11.66%) and the assessee-society (14.18%). He further observed that Mr. SA was a director in another pr