Trust granted tax exemption for pharmacy despite revenue's concerns. Appeal dismissed. Precedent cited.

The High Court upheld the Tribunal's decision to grant exemption under Section 11 of the Income Tax Act to a trust operating a pharmacy store, despite revenue's concerns about profit motive, non-compliance with conditions, and reliance on previous judgments. The Court dismissed the appeal, citing a previous judgment in favor of the assessee in a similar case.

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Issues:
1. Exemption under Section 11 of the Income Tax Act, 1961 for a pharmacy store run by a trust.
2. Compliance with conditions for exemption under Section 11.
3. Reliance on previous judgments by the Tribunal.

Issue 1: Exemption under Section 11 of the Income Tax Act, 1961 for a pharmacy store run by a trust:
The High Court heard an appeal by the revenue against the Income Tax Appellate Tribunal's order directing the assessing officer to allow exemption under Section 11 of the Income Tax Act. The Tribunal had allowed the claim of the assessee for exemption despite the revenue's contention that the trust's motive was profit-oriented due to the organized manner of the pharmacy store's operations. The High Court referred to a previous judgment in a similar case and found in favor of the assessee, leading to the dismissal of the appeal.

Issue 2: Compliance with conditions for exemption under Section 11:
The revenue raised concerns about the trust not maintaining separate books of accounts for the pharmacy store, a mandatory condition for eligibility for exemption under Section 11. The Tribunal, however, allowed the exemption despite this non-compliance. The High Court considered this issue but ultimately relied on a previous judgment where similar questions were answered in favor of the assessee, resulting in the dismissal of the appeal.

Issue 3: Reliance on previous judgments by the Tribunal:
The Tribunal's decision to rely on judgments by the Bombay High Court and a Co-ordinate Bench without considering the revenue's appeals and pending cases was questioned. However, the High Court found that a previous judgment had already addressed similar issues in favor of the assessee, leading to the dismissal of the appeal without costs.

In summary, the High Court upheld the Tribunal's decision to grant exemption under Section 11 to the trust despite concerns raised by the revenue regarding profit motive, non-compliance with certain conditions, and reliance on previous judgments. The dismissal of the appeal was based on the precedent set by a previous judgment in a similar case.

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