2010 (2) TMI 1183

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....s been formulated by the Revenue is as follows: "Whether, on the facts and circumstances of the case and in law, the Hon'ble ITAT was right in holding that the assessee was entitled to exemption under Section 11 of the Income Tax Act, 1961 ignoring the fact that the assessee trust had failed to apply its fund for charitable purpose as envisaged in the provisions of section 11 of the Act?" In the present case, Lilavati Kirtilal Mehta Medical Trust has been registered under Section 12A of the Income Tax Act, 1961. The Trust was accorded an exemption certificate under Section 80G for the period from 1st April 2003 to 31st March 2006. The certificate was renewed until 31st March 2009. The Trust has been founded with the object of af....

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....ore, a charitable purpose. The Appellate Authority held that once the object of the Trust was held to be a charitable purpose, this could be accomplished by establishing and running a hospital which in turn requires various operational expenses to be undertaken, besides the purchase of equipment in the form of capital assets. The assessee had during the year in question, expended an amount of Rs. 96.01 crores. The CIT (Appeals) came to the conclusion that the Assessing Officer was not justified in holding that the Trust had not applied 85% of its net surplus for charitable purposes and in denying exemption under Section 11 on that ground. The ITAT has while confirming the decision of the CIT (Appeals) also noted that the Trust has been g....