The assessee, a non-profit company registered u/s 25 of Companies Act and under S. 12A, invested in shares of its wholly owned subsidiary BARC, also a non-profit entity. AO denied exemption under S 11 & 12 alleging violation of S. 11(5) r.w.s. 13(1)(d). CIT(A) and Tribunal allowed exemption, holding the deployment of funds was mandated by Government policy and TRAI recommendations, not for profit. Dismissing Revenue’s appeal, the High Court held that deployment of funds was not an “investment” but an application in furtherance of assessee’s charitable objects. BARC, being a s. 25 company, could not distribute profits. Hence, no violation of s. 11(5) or s. 13(1)(d); exemption rightly allowed.(AY. 2014-15)