Received shares as corpus and subsequent sale there is no violation the assessee is eligible for exemption

Assessee trust received 11,47,110 equity shares of M. Ltd and 2,01,500 equity shares of S Ltd.from another trust towards corpus donation. There is no restriction on accepting shares by a charitable institution. However, cl.(iia) of the proviso to s. 13(1)(d)(iii) entitles an assessee trust to hold the shares for a maximum period of one year before which they have to be converted into the modes of investment as prescribed in s. 11(5). Contention of the Dept. Representative that the assessee has violated the provisions of s. 11(1)(d) by selling the shares suffers from the basic fallacy in not recognizing that the assessee has merely converted one form of investment into another viz. Money by selling the shares. The corpus donations received by the assessee could not be considered as general donations merely on the ground of its utilization in the subsequent year for giving corpus donations to other charitable institutions. (A.Y. 2006 – 07 & 2007‐08)
Sera Foundation v. ITO (2012) 79 DTR 210/150 TTJ 537 (Delhi) (Trib.)