2016 (8) TMI 1490

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....on the facts that the assessee runs a pharmacy store in the hospital for profit and earned profit from pharmacy store and not covered in the charitable activity. 3. During the course of hearing, the learned counsel for the assessee filed copy of the decision of Hon'ble Bombay High Court in the case of Baun Foundation Trust  vs. CCIT (2012) 73 DTR 0045 (Bom) and the copy of the order dated 27.05.2016 of the co-ordinate Bench in the case of Hiranandani Foundation vs. ADIT in ITA Nos. 560 to 563/Mum/2016. It was submitted that the case of the assessee is fully covered by the ratio of the said decisions and, therefore, the appeal of the revenue should be dismissed with cost. 4. The learned DR fairly agreed with the arguments advanced b....

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....un Foundation Trust (Supra), which was of course delivered in the context of the provisions of section 10(23C) of the Act and find relevant to extract the relevant para which is as follows: "4. In Aditanar Education Institute Etc. v. Additional Commissioner of Income Tax (1997) 224 ITR 310 (SC), the Supreme Court has observed, while construing the provisions of section 10(22) that the decisive or acid test is whether on an overall view of the matter the object is to make a profit. If after meeting the expenditure any surplus results incidentally from the activity lawfully carried on by the institution, it will not cease to be one existing solely for the statutorily stipulated purpose so long as the object is not to make a profit. Again, ....

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....isapplied himself in law by having regard to a clearly ancillary or incidental activity and elevating it to the status of the dominant purpose for which the hospital has been established. Running the chemist shop in the present case is not the dominant object or purpose of the trust. Nor would the figure as disclosed indicate that the nature of the activity has assumed such a dominating or overwhelming importance so as to cast doubt on the true nature and character of the hospital which is conducted by the Petitioner. The Chief Commissioner has acted contrary to the judgments of the Supreme Court which hold the field consequent upon which the impugned order would have to be set aside. " 13. From the above, it is clear that the running of....