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Shri Guru Gobind Singh Foundation, Moga vs Dcit, C-1 (E), Chandigarh on 29 March, 2019 cites

Commissioner Of Income-Tax vs V.G.P. Foundation on 8 October, 2002

(ii) Any funds of the trust or institution invested or deposited before the 1st day of March, 1983 otherwise than in any one or more of the forms or modes specified in sub-section (5) of section 11 continue to remain so invested or deposited after the 30 t h day of November, 1983 It is a fact that assessee is providing unsecured loan to its sister concern without any interest or security, which is not reasonable & undue benefit for assessee's sister concern. So assessee claim of exemption is denied u/s 13(l)(c) and u/s 13(l)(d) of I.T. Act, 1961. There is case law regarding this where Hon'ble Madras High Court in case of CIT Vs V.G.P. Foundation 183 CTR Mad 330, 2003/262 ITQ 187 has held that uit cannot be said on the facts of this case that the money had been applied by the assessee for charitable purpose in this year. The fact that the money, instead of lying with the assessee had laid with the sister company would not result in that amount being regarded as application of funds for a charitable purpose. Had the money remained with the assessee, it certainly could not have been regarded as having been utilised for charitable purposes. By giving it to a sister ^company which merely retained the money with it for the whole of the yaar, it is not possible to give the assessee the benefit regarding the amount as having been applied for a charitable purpose. There has also been contravention of Section 13(l)(d) read with Section 11(5) of the Act inasmuch as the trustees are also directors of the company and that company had the benefit of this amount throughout the year. The assessee did not realise any interest on that amount nor did it have any security for the amount so made available to the sister company. The questions referred to us are therefore answered in favour of the Revenue and against the assessee."
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