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c) It was in order to overcome this legal hurdle that the trust decided to form and register a society in Chattisgarh. In the name of Chiranjiv Educational Society as an independent unit. Accordingly, a society namely Chiranjiv Educational Society was registered in Chattisgarh. And signatories to the trust were the trustees of the Appellant Trust.

d) All objects of the said society are charitable and similar to the objects of the Appellant Trust. To enable the establishment of educational society/ private university, the appellant trust provided the funds to the society for the purpose of meeting the expenditure required for establishing the institution.

Establishment, legal and other expenses incurred in this behalf by Chiranjiv Educational Society at the behest of the appellant trust was to be made good to the Society and was in fact made good by the appellant trust on closure of operations by Chiranjiv Educational Society in 2008. Thus this was not a loan or advance but finances provided by way of assistance for the sole purpose of establishment of educational institution. These were in the nature of trust funds provided to the society for educational purposes for which the accounts were to be rendered. As stated earlier, these fund were provided not for any personal benefit by the appellant trust or its trustees. These funds were used by the appellant trust for effectuating its objects through the medium of Chiranjiv Educational Society. There was no personal benefits derived by the society or the trust. The objects of the appellant trust and the society being charitable, it was open under the law for the appellant trust even to make the donations of the above amounts to the society which would be regarded as application of income of the trust. This has been so held in various decisions. As a matter of fat, there is no prohibition under the Act in this behalf. There is also no requirement that the other charitable trust should be a registered trust u/s 12AB."

c) Bombay High court had no occasion to consider the applicability of Explanation 3 to section 13. indeed, it was not even referred.

This decision therefore is not applicable to the facts of the present case.

16. There is no dispute that the amount was advanced out of exempt income brought forward from earlier years available with the assessee trust. There is also no dispute that the assessee trust has never set apart funds and claimed exemption thereon u/s.11(a) read with section 11(2) of the Act. Therefore provisions of section 11(3) are also not applicable. In such a case the advance is also covered by the special treatment granted under CBDT Instruction no.1132 dt.5-1-1978 extracted in CIT v. Sarladevi Sarabhai Trust (No.2) (172 ITR 698 Guj. ) at 709 of the Report. The said instruction clearly states "where the payment by one charitable to another for utilization by the donee trust towards its charitable objects is proper application of income for charitable purpose". In the fact that the Chattisgarh Trust spent the amount so advanced for on purchase of land and for depositing Rs. 2 crores with the Govt of Chattisgarh for setting up a university which is not in dispute. The CBDT instruction No. 1132 is at Pg. 12 of the Paper Book filed on 26.8.2011.

17.1. It is thus pleaded that there is no justification in revenue ground proposing that CIT(A)s order on this issue is erroneous. The assessee and Chhatisgarh Trust having common charitable objects any amount utilized by it is to be considered as furthering the assesses charitable objects. Transactions having been accepted as genuine in view of the above judicial authorities, CIT(A)s order on this issue is urged to be upheld.

18. Apropos remaining ground in respect of corpus donations of:

Rs. 15 lacs from HCL Corpn.