1991 (1) TMI 126

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.... leading to this reference are stated hereinafter: The assessee was registered under section 25 of the Companies Act, 1956, on December 23, 1971. It is engaged in running a health centre for the benefit of persons suffering from illness or requiring medical attention or rehabilitation. It also derives income from business in contracts. It appeared that the assessee was being treated as a charitable institution and its income was being exempted under section 11 of the Act. During the year under consideration, the Income-tax Officer held that the assessee was not entitled to the exemption under section 11 of the Act because the provisions of section 13(2) of the Act were infringed. The assessee had also claimed, alternatively, exemption un....

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....the business income so that it was not utilised for any philanthropic purposes. There were separate rules and regulations for the health centre. Hence, it was urged that the decision of the Commissioner of Income-tax (Appeals) deserved to be reversed. The Tribunal held that the accumulated amount has been spent towards its philanthropic objects of establishing another health centre and, accordingly, the Tribunal confirmed the order of the Commissioner of Income-tax (Appeals) that the income from the health centre of the assessee is exempted under section 10(22A) of the Act. Before us, the Revenue reiterated the contentions raised before the Tribunal. Section 10(22A) provides that any income of a hospital or other institution for th....

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.... assessee spent sum of Rs. 12 lakhs for purchasing land and another sum of Rs. 59,646 had been spent for purchasing medical equipment. These expenses were incurred exclusively for the health centre and they completely offset the overall surplus of Rs. 3,70,279 for the year under consideration. It is not disputed that the health centre run by the assessee is an institution for reception and treatment of persons suffering from illness or requiring medical attention. A separate account has also been made out for the health centre which was filed before the Income-tax Officer. It is true that the surplus shown is included in the overall surplus of the combined accounts and has been adjusted in that combined account against the deficits brought ....