2016 (11) TMI 381

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.... a registered society, running a hospital, and also registered u/s 12A of the Act, filed its return of income for the A.Y. 2012-12 as 'NIL' claiming exemption u/s 11 of the Act. One of the objects of the assessee trust is to provide medical relief to the public at large. The A.O. while completing the assessment order brought Rs. 1, 93,14,650/- to tax as income from pharmacy store/pharmacy shop situated at the premises of the hospital on the ground that the assessee has been paying VAT to the Sales Tax department. In the first appeal the Ld. CIT(A) set aside the impugned assessment order by following the order of his predecessor passed in assessee's own case for A.Y. 2010-11. The revenue is in appeal against the said order passed by the Ld. ....

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....horised Representative (AR) for the assessee submitted that this issue has been decided in favour of the assessee by the Tribunal in assessee's own case for the A.Y. 2010-11 & 2011-12 in ITA No. 6861/Mum/2014 & ITA No. 4307/Mum/2015 and the assessee's case is squarely covered by the said decision. 6. We have head the rival submissions and also gone through material place before us including the decision of the co-ordinate Bench in assessee's own case referred above. The sole grievance of the revenue is that the Ld. CIT(A) has wrongly treated the income of the assessee from the activity of pharmacy store/shop exempt u/s 11(4A)of the Act, because according to the Assessing Officer such an activity is not incidental to its main activity. We n....

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....section (CIT vs Dharmodayam COMPANY (1997) 225 ITR 686, 692 (Kerala), wherein, the assessee was held to be entitle to claim exemption u/s 11(1) of the Act. In respect of the income from Kury business, which itself was held in trust by the assessee. This decision was set-aside by Hon'ble Apex Court in (2001) 248 ITR 816 (SC). In DIT vs Bombay Billion Association Dharma NO Kanto Trust (2002) 254 ITR 708 (Bom.), wherein, the general public was beneficiary, therefore, the Hon'ble jurisdictional High Court held that since there was substantial compliance of section 11(4A)(b), therefore, the trust was entitled to exemption. Identical ratio was laid down in DIT (E) vs Shilpam (1998) 230 ITR 126 (Cal.). As a result of substitution by the Finance ....

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.... Apex Court, while construing the provisions of section 10(22) observed the decisive or acid test is whether on an overall view of the matter, the object has to be considered. Identically, Hon'ble jurisdictional High Court in Baun Foundation Trust vs Chief Commissioner (2012) 251 CTR (Bom) 237, wherein, identically, the activity of chemist of was held to be incidental or ancillary to the dominant object and purpose to run a hospital. The Hon'ble Court held that running a chemist shop is not the dominant object for the purpose trust, therefore, the assessee's application was allowed u/s 10(23C) (via) of the Act, by holding that application of approval cannot be rejected on the ground that running of a shop in the hospital is incidental for t....