T. VENKATAPPA, J. M.: Since common points are involved these appeals are being disposed of together. WTO held that funds of Trust are invested in business concern, viz., M/s Dorabji Brothers wherein two of Trustees are substantially interested. trust was assessed to income-tax from asst. yrs. 1971-72 to 1978-79 on deposits with M/s Dorabji Brothers and other organisations. trust is not registered with CIT as required under s. 12A of t he IT Act, 1961. He rejected assessee's contention that it is charitable institution and hence its wealth should be exempted from tax. assessee appealed to AAC. AAC held that assessee trust would be entitled to exemption under s. 5(1)(i) of WT Act upto 1972-73 but thereafter assessee will not be entitled to exemption in view of introduction of s. 21A of WT Act wherein exemption under s. 5(1)(i) is available subject to provisions of s. 21A of WT Act only. He held that as funds of trust were invested in firm in which trustees were partners with substantial interest WTO was justified in denying exemption under s. 5(1) of WT Act. Sec. 21A of WT Act applies to assessee as trust property was used or applied for benefit of persons, i.e., trustees referred in s. 13(3) of IT Act. He did not accept assessee's contention that provisions of s. 13(2)(a) or 13(2)(h) of IT Act will not be applicable to assessee. He also held that assessee was not entitled to exemption under s. 5(1)(xxiii) of WT Act as shares held by individual or HUF only would be entitled to this exemption. Against said order, assessee has preferred these appeals. ld. counsel for assessee kly urged that neither provisions of s. 13(2)(a) nor of s. 13(2)(h) of IT Act would apply to assessee's case as lending of amount does not amount to investment and amount has been l e n t for adequate interest. Hence, s. 21A of WT Act also will not be applicable, and assessee is entitled to exemption under s. 5(1). Alternatively he submitted in additional grounds that assessee should be treated as individual as per provisions of s. 21A of WT Act and hence assessee is entitled for exemption under s. 5(1)(xxiii) of Act. We admit additional grounds as it is purely legal issue and AAC has also dealt with it. ld. Departmental Representative kly urged that no security has been taken for amounts deposited. Even interest paid on deposits which is less than 5 per cent cannot be considered as adequate interest. Thus assessee is clearly hit by provisions of s. 13(2)(a) of IT Act. He also urged that assessee is hit by s. 13(2)(h) as funds of trust continued to remain invested in concern in which trustees have substantial interest. He also urged that assessee is not entitled for exemption under s. 5(1)(xxiii) of WT Act. Under s. 5(1)(i) of WT Act property held under trust of or other legal obligation for any public purpose of charitable or religious nature in India is exempt from wealth-tax. But this exemption is not available under s. 21A of WT Act w.e.f. asst. yr. 1973-74 where is trust violates conditions laid down in s. 13 of IT Act by making use of trust property or its income for benefit of persons referred to s. 13(3) of IT Act. Sec. 13 of IT Act, 1961 makes s. 11 inapplicable in certain cases. Under s. 13(2) of IT Act benefit of s. 11 shall not be available to income of trust or institution if its income or property has been used or applied to benefit of person specified in s. 13(3). Trustees are one category of persons who come under s. 13(3). Under sub-s. (2)(a) of s. 13 if any part of income or property of trust is or continues to be lent to any person specified in sub-s. (3) of s. 13 without adequate security or interest or both, then income or property of trust shall be deemed to have used in applied for benefit of persons referred to in sub-s. (3) of s. 13. Once this provision applies, s. 21A is attracted and wealth-tax will be leviable. In instant case assessee trust has lent money to M/s Dorabjee Brother & Co. in which two of trustees had substantial interest. interest charged at 5 per cent on amount lent to said firm was not adequate interest. Further, no adequate security had been taken for amount lent to said firm. Thus this is case where is 13(2)(a) of IT Act is clearly attracted as assessee had lent amount without adequate interest and adequate security to benefit of trustees who come under specified category of persons under s. 13(3). Since s. 13(2)(a) applies it is not necessary for us to consider applicability of s. 13(2)(h). Sub-s. (4) of s. 13 of IT Act does not apply to assessee as interest of trustees in Dorabjee Brothers & Co. exceeds 5 per cent of capital of that concern. In CIT vs. Eternal Science of Man's Society (1980) 19 CTR (Del) 384: (1981) 128 ITR 456 (Del), Delhi High Court has held that if funds of trust are invested in debentures or loans then cl. (a) of sub-s. (2) of s. 13 applies. Thus in instant case, assessee is hit by s. 13(2)(a) and s. 13(3) of IT Act, 1961, and as such under s. 21A of WT Act, assessee is liable to wealth-tax and it is not entitled to exemption under s. 5(1)(i) of WT Act. We find force in alternative contention raised by assessee by way o f additional ground which we have admitted. Under s. 21A of WT Act, wealth-tax shall be leviable and recoverable from trustee or manager in like manner and to same extent as if property were held by individual. In view of above, status of assessee has to be taken as individual. Once status is taken as individual, exemption under s. 5(1)(xxiii) will be available to assessee. Thus we direct WTO to allow exemption under s. 5(1)(xxiii). No other contention was raised. In result, appeals are partly allowed. *** J. E. Chenoy Charitable Trust v. Wealth-tax Officer