Assessing Officer held  that when capital gain was invested in TSL, founder trustee of assessee was a Chairman of TSL and thus could have influenced decision of TSL as well as of assessee trust at time of investment and thus, by investing in shares of TSL, assessee had violated provisions of section 13(2)(h). Tribunal held that  the  founder trustee of assessee, was holding 3,368 ordinary shares of TSL constituting only 0.83 per cent of aggregate paid-up ordinary share capital of TSL, which was much less than threshold requirement of provision of Explanation-3 to section 13.  Therefore, founder trustee of assessee could not be held to be having ‘substantial interest’ in TSL and thus, investment by assessee trust in shares of TSL was not affected by vice of section 13(2)(h) of the Act. The assessee trust had made investment in redeemable preferential shares of TSL which Assessing Officer, inter alia, held to be in violation of provision of section 13(1)(d), entire income of trust shall not become ineligible for exemption under section 11. The Tribunal held that  it was to be restricted only to income derived from prohibited investments. The Assessing Officer was to be directed to grant exemption under section 11 on interest income and income earned from non-prohibited investments by assessee.  (AY. 2011-12 to 2014-15)