TaxTMI 
TaxTMI 
2010 (2) TMI 753
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....the trust was charging fee etc. for the services rendered and there was excess of income over expenditure after the claim of depreciation. The learned CIT-I, Jalandhar also observed that there was surplus of income in the institutions, namely, nursing education (school), nursing education (college) and Gulab Devi Memorial Hospital Trust, Jalandhar even after claim of depreciation as business expenditure which gives clear indication of substantial surplus/profits are being generated systematically for the purpose of business of the trust. The learned CIT-I also examined detail of donation and other receipts and their application was found at page No. 2 in the impugned order. It is apparent that the donations were not fully utilised for charitable purposes and resulted in surplus. The other receipts (free T.B. beds) were, in fact, receipts of paid beds. After examining the income and expenditure and donation and claim of depreciation, he was of the opinion that the trust appeared to be engaged in profiteering rather than in charitable and philanthropic activities as contemplated in the object of the trust. Finally, he was of the opinion that the trust does not satisfy the conditions ....
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.... has also to be viewed from the point of view of gross receipt as provided in the Act itself. He further stated that the learned CIT-I, Jalandhar has not appreciated the correct position of income and expenditure on the basis of documentary evidence produced by the assessee to him, which clearly shows that the funds of the institution have been almost fully utilised or in fact utilised even out of the earlier savings. Therefore, keeping in view the income and expenditure of the assessee, the capital expenditure has to be considered as application of income. To support his arguments, he cited the decision of the Hon'ble Gujarat High Court in the case of Satya Vijay Patel Hindu Dharamshala Trust vs. CIT (1972) 86 ITR 683 (Guj) wherein while dealing with s. 11, it was held that the capital expenditure has also to be considered as application of income. He further stated that this view has also been affirmed by the Hon'ble Supreme Court of India in the case of S.RM.M.CT.M. Tiruppani Trust vs. CIT (1998) 145 CTR (SC) 176 : (1998) 230 ITR 636 (SC). 5. He further stated that if the assessee is not expected to make any surplus or generate any income, there was no need for providi....
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....is not using the fund for charitable purposes, the learned counsel for the assessee submitted that the word has been defined in the Act at s. 2(15) itself and includes "relief of the poor, education, medical relief............................" Thus, it cannot be said that the assessee is not using the fund for charitable purposes as the funds are being used only for the above purposes but the objection of the learned CIT-I, Jalandhar is that the assessee-trust having certain surpluses. The learned counsel for the assessee stated that the surplus is not fatal to being treated as charitable institution. In support of his contention, he cited the decisions:- (1) Gaur Brahmin Vidya Pracharini Sabha vs. CIT, ITA No. 1905/Del/2009, order dt. 11th Sept., 2009 (Tribunal Delhi Bench 'B', New Delhi.) (Copy attached at page Nos. 43 to 47 of the paper book). [reported at (2009) 32 DTR (Del)(Trib) 473-Ed.] (2) Addl. Director of IT (Exemption) vs. Manav Bharati Child Institute and Child Psychology (2008) 20 SOT 517 (Del). Finally, he stated that the learned CIT-I, Jalandhar has been regularly granting exemption under s. 80G of the IT Act, 1961 to the assessee for th....
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....ndoned the delay and granted the registration under s. 12A(a) of the IT Act, 1961 to the assessee-trust on 14th/16th July, 1977. Simultaneously, the learned CIT-I, Jalandhar has also granted exemption under s. 80G of the IT Act, 1961 on the same day stating that donations made to Gulab Devi Memorial Hospital Trust, Jalandhar will qualify for exemption under s. 80G of the IT Act, 1961 in the hands of the donors subject to the limits and conditions prescribed therein. It will be valid for the years ending 31st March, 1977 and 31st March, 1978, relevant to the asst. yrs. 1977-78 and 1978-79. Later on, the learned CIT, Jalandhar also granted exemption under s. 80G of the IT Act, 1961 to the assessee trust valid for the years ending 31st March, 1997, 31st March, 1998 and 31st March, 1999, relevant to the asst. yrs. 1997-98, 1998-99 and 1999-2000. As per the records produced by the learned counsel for the assessee in the paper book at pp. 35 to 41, the learned CIT also granted exemption under s. 80G of the IT Act, 1961 for the period ending 31st March, 2000, 31st March, 2001, 31st March, 2002 relevant to the asst. yrs. 2000-01, 2001-02 and 2002-03 vide order dt. 15th Oct., 1999. Similarl....
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....ges at Jalandhar and claiming the depreciation which is admissible under the law. If the depreciation in such case is not allowed as a necessary deduction by computing the income of the assessee, there will be no way to preserve the corpus of the trust. Merely claiming the depreciation by the assessee trust is no ground for denial of exemption under s. 80G of the IT Act, 1961 and also holding that the activity of the assessee trust is not charitable. 10. This view has also been followed by the Tribunal, Amritsar Bench, Amritsar in various cases, one of the case is ITA No. 273/Asr/2005 in the case of Smt. Maya Devi Sachdev Educational Society vs. CIT order dt. 25th April, 2007. This order has been placed by the learned counsel for the assessee at pp. 10 to 19 of the assessee's paper book. The learned CIT-I, Jalandhar has not properly appreciated the utilisation of the funds by the assessee. As per record produced by the assessee before us in the assessee's paper book, which clearly shows that the funds of the institution have been almost fully utilised or in fact, utilised even out of earlier savings. The learned CIT-I, Jalandhar has not taken thoroughly to consider the is....
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....so be considered as application of funds. The learned CIT-I, Jalandhar has not mentioned even a single word in the impugned order that the assessee trust has been misutilising the funds. The law anticipated that service would be generated and it is for this reason that the provisions of ss. 11 and 12 were incurred (sic-inserted) in the IT Act, 1961. Exemption contemplates profits/surplus. If an institution is not expected to make any surplus or generate any income there was no need for providing for any exemption, Therefore, the view taken by the learned CIT-I, Jalandhar regarding the assessee having generated surplus even for claim of depreciation is not tenable in the eye of law and keeping in view the aforesaid discussion, with the support of the decision rendered by the Hon'ble Karnataka High Court in the case of CIT vs. Society of The Sisters of St. Anne (supra) and the decision of the Hon'ble Gujarat High Court in the case of Satya Vijay Patel Hindu Dharamshala Trust vs. CIT (supra). Now we want to discuss the intention of the assessee trust whether the assessee trust is running for making profit or not. As the learned CIT-I, Jalandhar in the impugned order at page No. 2, par....
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.... Advance laparoscopic surgery (operation by lapropscopy) 5,500 Chest inutubatioin insertion of tube in chest) 600 + 60 Biopsy 600 + 60 Abscess major 600 + 60 OT charges for minor/major operations 650 Minor dressing 40 Major dressing 100 Gynaecology charges procedures:- Normal delivery 900 Normal delivery with Episotomy 1,000 Breach delivery 1,300 Forceps delivery 1,350 Face presentation 1,050 1. Twins delivery 1,500 Plancepta manual removal 660 2. Pre-mature delivery/aborted 1000 Abortion/Emcredyal 2,100 3. Resuturing 660 Major operations:- Cessaerian sections (L.S.C.S.) 2,600 Abdominal or Vaginal Hystractomy (removal of uterus) 2,600 Tubectomy (Tubal ligation) 660 Cloporrhaphy Simple (P.F.R.) (repair of pelvic floor) 1,550 Manchester operation (major surgery for uterine cancer) 1,750 Ostighting Operation (McDonalds) (Repair Surgery) 1,650 Hysteromy 2,100 3rd Degree tear stitches 1,050 Lapretorny (ectopic rupture) (opening and exploration of abdomen) 2,650 Tubal recanalisation (rejoining of ....