Assistant Commissioner of Income-tax, V. M/s. Noble Medical Foundation & Research Centre, Ahmednagar

ITA 2328/PUN/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4309 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 05-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS SHWETA MISHRA
• Assessee Lawyers: HARI KRISHAN
• Keywords: Charitable institution; Additional evidence
• Section: 12A; 12AA; 12; 11

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . . . . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO. 2328/PUN/2016 / ASSESSMENT YEAR : 2011-12 ACIT, EXEMPTION CIRCLE, AURANGABAD . / APPELLANT V/S M/S. NOBLE MEDICAL FOUNDATION & RESEARCH CENTRE, DHANAJI NAGAR, HOTEL PREMDAN CHOWK, AHMEDNAGAR PAN : AAATN6572C . / RESPONDENT ASSESSEE BY : SHRI HARI KRISHAN REVENUE BY : MRS. SHWETA MISHRA / ORDER PER D. KARUNAKARA RAO, AM : THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A)-10, PUNE, DATED 27-07-2016 FOR THE ASSESSMENT YEAR 2011-12. 2. BRIEFLY STATED RELEVANT FACTS OF THE CASE INCLUDE THAT ASSESSEE IS A CHARITABLE TRUST (AOP) AND IS ENGAGED IN RUNNING OF A HOS PITAL AND GIVING MEDICAL RELIEF. THE TRUST CAME INTO EXISTENCE ON 16-0 8-2004 AND GOT REGISTERED UNDER THE BOMBAY PUBLIC TRUST ACT, 1950 O N 16-10-2004. ASSESSEE TRUST IS REGISTERED U/S.12AA OF THE I.T. ACT. ASSESSEE FILED ITS RETURN OF INCOME ON 28-09-2011 DECLARING NIL INCOME AFTER C LAIMING EXEMPTION U/S.11 OF THE ACT IN RESPECT OF SURPLUS OF RS.1,64 ,83,398/-. IN THE COURSE OF ACHIEVING ITS OBJECTS, ASSESSEE RAISED A MULTI SPECIALITY / DATE OF HEARING :30.07.2018 / DATE OF PRONOUNCEMENT: 03.08.2018 2 ITA NO.2328/PUN/2016 M/S. NOBLE FOUNDATION AND RESEARCH CENTRE HOSPITAL AT AHMEDNAGAR. IN ACCORDANCE WITH THE PROVIS IONS OF BOMBAY PUBLIC TRUST ACT, 1950, 10% OF THE OPERATIONAL BEDS NEEDS TO BE USED FOR TREATING THE PATIENTS FROM THE WEAKER SECTIONS OF THE SOCIETY. DURING THE YEAR UNDER CONSIDERATION, THE TRUST WAS REQUIRED T O SPENT 2% OF THE GROSS RECEIPTS, I.E. RS.14,65,854/- AND HOWEVER, THE TRUST S PENT RS.1,34,44,118/-. ON EXAMINATION OF THE VARIOUS RECEIPTS VIZ, RENTS RECEIVED BY THE TRUST, CONSULTATION FEES PAID TO THE VARIO US CONSULTANTS/SURGEONS, CONSULTATION FEES PAID TO THE TRUST EES, INVESTMENTS MADE BY THE TRUST AND THE REPAYMENT OF SE CURED LOAN, LIST OF CONCESSIONS GIVEN TO IPD/OPD PATIENTS (WEAKER SECTIO NS), THE AO OPINED THAT THE ASSESSEE TRUST CARRIED THE COMMERCIAL ACTIVITIES WHICH ARE IN THE NATURE OF TRADE OR COMMERCE. HE FURTHER, OPIN ED THAT GIVING DISCOUNTS OR MAKING REMISSIONS IN THE PATIENTS BILL IS COMMON PRACTICE IN THE MEDICAL FIELD AND MERE CONDUCTING FREE TESTS DURING CAMPS ORGANIZED DO NOT CONSTITUTE MEDICAL RELIEF WITHIN THE MEA NING OF SECTION 2(15) OF THE ACT. FURTHER, THE HUGE AMOUNT OF RS.4.62 CROR ES IS COLLECTED ON ACCOUNT OF IPD/OPD PATIENTS AND THE SAME IS ATTRIBUTABLE TO THE SERVICES OF DR. B.E. KANDEKARS CONSULTANCY ALONE. THE PAYMENT MADE TO DR. B.E. KANDEKAR TOWARDS HIS PROFESSIONAL CONSULTA NCY IS ALSO MUCH HIGHER AND IN VIOLATION OF PROVISIONS OF SECTION 13(1)(C) O F THE ACT. THEREFORE, AO OPINED THAT THE ASSESSEE TRUST HAS DOMINA NT INTENTION OF THE PROFIT MOTIVE AND THE SAME CONSTITUTES THE VIOLATION O F THE PROVISIONS OF THE PROVISO TO SECTION 2(15) OF THE ACT. EVEN TUALLY, THE AO, REJECTING THE EXPLANATION GIVEN BY THE ASSESSEE-TRUST, A SSESSED THE INCOME OF THE ASSESSEE TRUST AT RS.1,64,83,400/- AS AGAIN ST THE NIL INCOME RETURNED BY THE ASSESSEE TRUST. THE TAXABLE INC OME IS DETERMINED AT RS.65,07,381/-. 3 ITA NO.2328/PUN/2016 M/S. NOBLE FOUNDATION AND RESEARCH CENTRE 3. IN THE FIRST APPELLATE PROCEEDINGS, THE CIT(A) ALLOWED TH E CLAIM OF THE ASSESSEE RELYING ON THE DECISIONS OF HIS PREDECESSO R FOR THE A.YRS. 2008-09, 2009-10 AND 2010-11 AND ALSO CONSIDERING THE FA CT THAT THE FINDINGS GIVEN BY THE CIT(A) WERE CONFIRMED BY THE ITAT, PUN E. FOR THE SAKE OF COMPLETENESS, THE FINDING GIVEN BY THE CIT(A) IS REPR ODUCED HERE AS UNDER : GROUND NO.1 : THIS GROUND RELATES TO CHALLENGING THE DENIAL OF EX EMPTION U/S 11 OF I.T . ACT . CONSIDERING ALLEGED VIOLATION OF SECTION 13 OF I.T. ACT, I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT CAREFULL Y AND GONE THROUGH THE ASSESSMENT ORDER . ADMITTEDLY, THE APPELLANT IS A TRUST ENGAGED IN MEDICAL RELIEF HAVING REGISTRATION U/S 12A . IN FACT, WHILE DENYING THE EXEMPTION FOR THE YEAR UNDER CONSIDERATION THE A . O. HAS TAKEN INTO CONSIDERATION AN IDENTICAL REASON, W HICH WAS TAKEN IN PRECEDING YEARS, I.E. IN A.Y.2008-09, 2009-10 AND 2 010-11. IN THESE YEARS, MY LD. PREDECESSOR HAVE ALLOWED THE APPEALS AND THOSE DECISIONS WERE AFFIRMED SUBSEQUENTLY BY HON'BLE I . T.A . T., PUNE. THE APPELLANT HAS RELIED ON THOSE DECISIONS IN THIS YEAR'S APPEAL . ENTIRE FACTS AND CIRCUMSTANCES RELATING TO THIS GROUND ARE SAME AS W AS AVAILABLE IN A . Y. 2008-09, 2009-10 AND 2010-11 . THE FACTS DISCUSSED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER ARE SIMILAR TO THE FACTS DISCUSSED IN THOSE YEARS AND NO ADDITIONAL EVIDENCES, WHATSOEVER, HAVE BEEN BROUGHT ON RECORD TO MAKE OUT A CASE. IN VIEW OF THE ABOVE, IT IS HELD THAT THE ENTIRE FACTS AND CIRCUMSTANCES EXCEPT FOR THE AMOUNT OF EX EMPTION CLAIMED U/S 11 ARE SAME AND THEREFORE, RELYING ON THE FINDINGS GIVEN IN A . Y. 2008-09, 2009-10 AND 2010-11 BY MY LD. PREDECESSORS AND HON' BLE I.T.A . T., PUNE, THE ASSESSING OFFICER IS DIRECTED TO ALLOW TH E EXEMPTION U/S. 11 OF I.T. ACT. ACCORDINGLY, GROUND NO.1 IS TREATED AS AL LOWED. 4. AGGRIEVED WITH THE ORDER OF CIT(A) THE REVENUE IS IN AP PEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. WHETHER ON THE FACT AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) IS JUSTIFIED IN NOT APPRECIATING THE FACT THAT THE TRUST HAD APPLIED ITS IMMOVABLE PROPERTY AND THE INCOME F OR THE BENEFIT OF THE MANAGING TRUSTEE IN VIOLATION OF PROVISIONS OF SECT ION 13(1)(C) OF THE ACT? 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) IS JUSTIFIED IN NOT APPRECIATING THE FACT THAT THE MANAGING TRUSTEE HAD DIVERTED THE INCOME BY USING T RUSTS INFRASTRUCTURE FOR HIS PRIVATE GAINS IN VIOLATION OF THE PROVISION OF SECTION 13(1)(C) R.W. SEC.13(2)(B) & 13(2)(G) OF THE I.T. ACT, 1961. 5. LD. DR FOR THE REVENUE SUBMITTED THAT THE LD.CIT(A) HA S NOT APPRECIATING THE FACTS THAT THE CHIEF TRUSTEE DR. B.E.KAN DEKAR, CHIEF TRUSTEE HAS DIVERTED THE INCOME OF THE ASSESSEE TRUST BY USING ITS 4 ITA NO.2328/PUN/2016 M/S. NOBLE FOUNDATION AND RESEARCH CENTRE INFRASTRUCTURE FOR HIS PERSONAL GAIN. THE ACTIVITIES OF THE ASSESSEE TRUST ARE IN THE NATURE OF TRADE OR COMMERCE AND THE PREDO MINANT OBJECT OF THE ASSESSEE TRUST IS PROFIT MOTIVE. HE, THEREFORE, PRAY ED FOR REVERSING THE ORDER OF THE CIT(A). 6. ON THE OTHER HAND, LD. COUNSEL FOR THE ASSESSEE FILED THE COPY OF THE ORDER OF PUNE BENCH OF THE TRIBUNAL IN THE ASSESSEE S OWN CASE FOR THE A.YRS. 2008-09, 2009-10 AND 2010-11. HE SUBMITTED THAT THE GROUNDS (GROUND NOS. 1 AND 2) RAISED BY THE ASSESSEE TR UST IN THIS APPEAL ARE IDENTICAL IN THOSE ASSESSMENT YEARS TOO AND T HEY WERE ALREADY ADJUDICATED BY THE ITAT, PUNE IN FAVOUR OF THE AS SESSEE. THEREFORE, LD. COUNSEL PRAYED FOR DISMISSING THE APPEAL FILED BY THE REVENUE BEING DEVOID OF ANY MERIT. 7. WE HEARD BOTH THE SIDES AND PERUSED THE ORDERS OF THE REVENUE AND THE DECISION OF THE TRIBUNAL IN ITA NOS. 1683/PN/2012, 130/PN/2013 AND 2123/PN/2013, DECIDED ON 08-04-2015. WE FIND THE TRIBUNAL DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE B Y HOLDING AS UNDER : 17. THE FIRST ASPECT OF THE ISSUE RAISED BEFORE US IS WHETHER THERE IS NON-FULFILLMENT OF CONDITIONS PRESCRIBED IN SECTION 2(15) OF THE ACT. AS PER THE DEFINITION OF CHARITABLE PURPOSES IN SECTION 2( 15) OF THE ACT, THE RECOGNITION HAS BEEN GIVEN TO THE ACTIVITIES OF PRO VIDING RELIEF TO THE POOR, EDUCATION, MEDICAL RELIEF AND ADVANCEMENT OF ANY OT HER OBJECT OF GENERAL PUBLIC UTILITY TO BE A ACTIVITY FOR CHARITABLE PURP OSE. PROVISO HAS BEEN INSERTED BY THE FINANCE ACT, 2008 UNDER SECTION 2(1 5) OF THE ACT W.E.F. 01.04.2009, UNDER WHICH, IT HAS BEEN PROVIDED THAT IN CASE OF ADVANCEMENT OF ANY OTHER SUBJECT OF GENERAL PUBLIC UTILITY SHALL NOT BE CHARITABLE, IF IT INVOLVES CARRYING ON OF ANY ACTIV ITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS OR ANY ACTIVITY OF RENDERING A NY SERVICE IN RELATION TO SUCH TRADE, COMMERCE OR BUSINESS FOR A CESS, FEES , OR ANY OTHER CONSIDERATION. THE RESTRICTION CLAUSE BY WAY OF PR OVISO TO SECTION 2(15) IS WITH REGARD TO ADVANCEMENT OF ANY OTHER SUBJECT OF GENERAL PUBLIC UTILITY I.E. THE FOURTH CLAUSE OF SECTION 2(15) OF THE ACT IN RESPECT OF THE ACTIVITY OF PROVIDING RELIEF TO THE POOR, EDUCATION AND MEDICAL RELIEF. THERE IS NO RESTRICTIVE COVENANT IN THE SAID PROVISO UNDER SECT ION 2(15) OF THE ACT IN RESPECT OF PROVIDING RELIEF TO POOR, EDUCATION AND MEDICAL RELIEF. IN OTHER WORDS, WHERE THE ASSESSEE TRUST IS ENGAGED IN ACTIV ITIES WITHIN THE FRAMEWORK OF LAW TO PURSUE ITS OBJECTIVES AND IN TU RN RECEIVES CHARGES FOR RENDERING THE SERVICES IN FURTHERANCE OF ITS ACTIVI TIES, IT CANNOT BE SAID THAT THE TRUST IS NOT CHARITABLE. IT HAS BEEN LAID DOWN BY VARIOUS LEGAL 5 ITA NO.2328/PUN/2016 M/S. NOBLE FOUNDATION AND RESEARCH CENTRE PROPOSITIONS THAT WHERE THE PREDOMINANT OBJECT OF T HE TRUST OR INSTITUTION IS TO CARRY OUT THE ACTIVITIES FOR CHARITABLE PURPO SES AND NOT TO EARN PROFIT, IT WOULD NOT LOSE ITS CHARACTER OF BEING FOR CHARIT ABLE PURPOSE, MERELY BECAUSE SOME PROFIT ARISES FROM THE ACTIVITY. THE CBDT IN ITS CIRCLE NO.11, DATED 19.12.2008 HAD CLARIFIED THAT WHERE TH E PURPOSE OF TRUST OR INSTITUTION IS RELIEF OF THE POOR, EDUCATION OR MED ICAL RELIEF, IT WOULD CONSTITUTE CHARITABLE PURPOSE, EVEN IF INCIDENTALLY INVOLVES CARRYING ON THE COMMERCIAL ACTIVITIES. IN VIEW THEREOF, WHERE THE ASSESSEE WAS ENGAGED IN CARRYING ON THE ACTIVITIES FOR ATTAINING THE OBJECTS OF PROVIDING MEDICAL RELIEF TO PEOPLE AT LARGE AND SUR PLUS WAS GENERATED FROM HOSPITAL ACTIVITIES FOR DOING CHARIT ABLE WORK IN THE HANDS OF THE ASSESSEE, DOES NOT ESTABLISH THE C ASE OF THE ASSESSING OFFICER THAT IT WAS NOT ENGAGED IN CHARIT ABLE ACTIVITIES. FURTHER, THE ASSESSEE TRUST WAS ESTABLISHED FOR THE PURPOSE OF GRANTING MEDICAL RELIEF AND THE ACTIVITIES HAVING BEEN CARRI ED OUT AS PER THE TERMS OF SETTLEMENT AND THE SAID ACTIVITIES HAVING BEEN R ECOGNIZED AS CHARITABLE UNDER THE PROVISIONS OF THE ACT, EVEN RECOGNITION G IVEN BY THE BOMBAY PUBLIC TRUST ACT AND ALSO BY THE REGISTRATION GRANT ED UNDER SECTION 12AA OF THE ACT, WE FIND NO MERIT IN THE ORDER OF ASSESS ING OFFICER, IN THIS REGARD. 18. WE FIND THAT SIMILAR RATIO WAS LAID DOWN BY DELH I BENCH OF THE TRIBUNAL IN ADDL. DIRECTOR OF INCOME TAX (EXEMPTION ) VS. MANAV BHARATI CHILD INSTITUTE & CHILD PSYCHOLOGY (SUPRA), THAT ME RELY BECAUSE THERE WAS SOME SURPLUS IN THE ACTIVITIES CARRIED ON BY TH E SOCIETY, THE SAME WOULD NOT DIS-ENTITLE TO CLAIM EXEMPTION UNDER SECT ION 11 AND 12 OF THE ACT. SIMILAR PROPOSITION HAS BEEN LAID DOWN BY THE DELHI BENCH OF THE TRIBUNAL IN ITO VS. DHARAMSHILA CANCER FOUNDATION & RESEARCH CENTRE (SUPRA), WHEREIN IT HAS BEEN LAID DOWN THAT THE PRO FITABILITY IS NOT THE SOLE CRITERIA TO JUDGE THE CHARITABLE NATURE OF A SOCIET Y AND WHERE THE ASSESSING OFFICER HAS FAILED TO TAKE INTO CONSIDERA TION THAT INCOME WAS ONLY APPLIED FOR THE PURPOSE OF CHARITY, THERE WAS NO JUSTIFICATION IN NON- GRANT OF BENEFIT UNDER SECTION 11 OF THE ACT. THE HONBLE KERALA HIGH COURT IN CIT VS. PULIKKAL MEDICAL FOUNDATION (P) LT D. (SUPRA) HAD ALSO LAID DOWN SIMILAR PROPOSITION THAT MERELY BECAUSE THE ASS ESSEE WAS RUNNING A HOSPITAL ON COMMERCIAL LINES, IT WOULD NOT BE DIS -ENTITLED TO THE EXEMPTION UNDER SECTION 10(22) OF THE ACT. THE LEA RNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE HAD MADE A REFERENC E TO THE RATIO LAID DOWN BY PUNE BENCH OF THE TRIBUNAL IN IN PARKAR MED ICAL FOUNDATION VS. DCIT (SUPRA). HOWEVER, ON THE PERUSAL OF ORDER, WE FIND THAT THOUGH REFERENCE WAS MADE TO THE VARIOUS SUBMISSIONS MADE BY THE ASSESSEE, EVEN WITH REGARD TO THE ASSESSEE TRUST RUNNING THE HOSPITAL ON COMMERCIAL BASIS AND ITS EFFECT, BUT THE SAID ISSUE S HAVE NOT BEEN ADJUDICATED AS REGISTRATION UNDER SECTION 12A OF TH E ACT WAS ALLOWED TO THE ASSESSEE ON OTHER ISSUES. IT WAS FURTHER HELD THAT THE ASSESSING OFFICER WHILE ASSESSING THE INCOME IN THE HANDS OF CHARITABLE TRUST, HAS THE POWER TO DENY EXEMPTION TO THE EXTENT IT IS COV ERED UNDER SECTION 13(1)(C) OF THE ACT. ACCORDINGLY, WE FIND NO MERIT IN THE RELIANCE PLACED UPON BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR T HE ASSESSEE. 19. THE HONBLE SUPREME COURT IN CIT (ADDL) VS. SUR AT ART SILK CLOTH MANUFACTURERS ASSOCIATION (SUPRA) HAD ALSO LAID DOW N THE PROPOSITION THAT FOR THE ACCOMPLISHMENT OF OBJECT OR MEANS TO C ARRY OUT THE OBJECT, IT IS NOT NECESSARY THAT IT SHOULD NOT INVOLVE ANY ACTIVI TY FOR PROFIT, IN CASES, WHERE THE PREDOMINANT OBJECT OF THE TRUST IS TO CAR RY OUT THE ACTIVITY FOR CHARITABLE PURPOSES AND NOT TO EARN PROFIT. FURTHE R, IT WAS HELD THAT THE TRUST WOULD NOT LOSE ITS CHARACTER OF A CHARITABLE PURPOSE MERELY BECAUSE SOME PROFIT ARISES FROM THE ACTIVITIES. REFERENCE WAS MADE TO THE EXCLUSIONARY CLAUSE APPLICABLE AT THAT TIME AND IT WAS HELD THAT THE SAME DOES NOT REQUIRE THAT THE ACTIVITY MUST BE CARRIED ON IN SUCH A MANNER THAT IT DOES NOT RESULT IN ANY PROFIT. 6 ITA NO.2328/PUN/2016 M/S. NOBLE FOUNDATION AND RESEARCH CENTRE 20. NOW, COMING TO THE SECOND ASPECT OF EXEMPTION U NDER SECTION 11 OF THE ACT TO THE ASSESSEE, IN VIEW OF VIOLATION OF PR OVISIONS OF SECTION 13(1)(C) OF THE ACT. IN THE FACTS ENUMERATED HEREI N-IN-ABOVE AND ALSO WHILE MAKING REFERENCE TO THE OBSERVATIONS OF THE A SSESSING OFFICER, IT HAS BEEN REFERRED TO BY US THAT THE ASSESSEE TRUST WAS SETTLED BY DR. KANDEKAR, MANAGING TRUSTEE AND FOUR OTHER AS TRUSTE ES. DR. KANDEKAR WAS A CARDIOLOGIST AND HE ALONG WITH HIS WIFE MADE AVAILABLE 45,000 SQ. FT. OF CONSTRUCTED BUILDING TO THE TRUST TO CARRY O N ITS ACTIVITIES OF RUNNING HOSPITAL THEREFROM. THE ASSESSEE TRUST WAS PAYING M ONTHLY RENTAL OF RS.6 LAKHS TO DR. KANDEKAR AND HIS WIFE. IN ADDITION, C ERTAIN PORTION APPROXIMATELY 475 SQ. FT. OF THE HOSPITAL PREMISES WAS GIVEN TO A COMPANY CALLED CATHLAB (I) PVT. LTD. ON A MONTHLY R ENTAL OF RS.9,500/-, WHICH COMPANY BELONGED TO DR. KANDEKAR AND HIS WIFE . A MOU WAS ENTERED INTO BETWEEN THE TRUST AND THE COMPANY, AS PER WHICH IT WAS UNDERSTOOD THAT THE COMPANY WOULD EXCLUSIVELY PROVI DE ITS SERVICES AT CONCESSIONAL RATES TO THE PATIENTS OF THE HOSPITAL. IT HAS BEEN NOTED BY THE ASSESSING OFFICER THAT DR. KANDEKAR WAS CARRYIN G OUT A PRIVATE PRACTICE BEFORE JOINING THE HOSPITAL RUN BY THE ASS ESSEE TRUST. THE OBJECTION OF THE ASSESSING OFFICER WAS THAT IN THE RETURN OF INCOME FILED FOR THE EARLIER YEARS, HE HAD CLAIMED DEDUCTION FOR SAL ARY PAID TO HIS ASSOCIATED DOCTORS AND EVEN IN RETURN FILED FOR ASS ESSMENT YEAR 2008-09, SIMILAR DEDUCTION WAS CLAIMED IMPLYING THEREBY THAT DR. KANDEKAR HAD SHIFTED HIS PLACE OF PRIVATE PRACTICE TO THE TRUST HOSPITAL. FURTHER, THE OBJECTION OF THE ASSESSING OFFICER WAS THAT HE WAS CONTROLLING AND RUNNING WHOLE HOSPITAL AND WAS ALSO RECIPIENT OF CO NSULTANCY FEES OF RS.47,08,412/- OUT OF TOTAL CONSULTANCY FEES OF RS. 53,44,934/- PAID TO FOUR TRUSTEES. IN THIS REGARD, THE ASSESSING OFFIC ER OBSERVED THAT THE CONSULTANCY FESS PAID TO DR. KANDEKAR ALONE CONSTIT UTE 88%. HOWEVER, THE ASSESSING OFFICER ALSO ADMITTED THAT THE AMOUNT OF CORRESPONDING GROSS IPD/OPD RECEIPTS ATTRIBUTED TO HIS CONSULTANC Y ALONE IN THE HANDS OF THE TRUST WERE OF RS.2.32 CRORES, WHICH WAS ABOU T 72% OF THE TOTAL RECEIPTS OF THE TRUST, WHICH STOOD AT RS.3.22 CRORE S. 21. WE FIND NO MERIT IN THE OBSERVATIONS OF THE ASS ESSING OFFICER IN THIS REGARD THAT THE PROVISIONS OF SECTION 13(1)(C) OF THE ACT HAVE BEEN VIOLATED. ADMITTEDLY, DR. KANDEKAR IS THE INTEREST ED PARTY AS PER PROVISIONS OF SECTION 13(3) OF THE ACT ARE CONCERNE D. HOWEVER, THE FINANCIAL ASPECTS REFLECT THAT OUT OF TOTAL RECEIPT S OF THE TRUST OF RS.3.22 CRORES, ADMITTEDLY 72% OF THE SAID RECEIPTS AT RS.2 .32 CRORES WERE ATTRIBUTABLE TO SERVICES OF DR. KANDEKAR, AGAINST W HICH HE WAS PAID CONSULTANCY FEES OF ONLY RS.47,08,412/-. THE BALAN CE RECEIPTS WERE ATTRIBUTABLE TO THE TRUST AS PER THE AGREEMENT BETW EEN CONSULTANT DOCTORS AND THE TRUST, WHEREIN ONLY CONSULTANCY FEES WAS TR ANSFERRED TO THEIR ACCOUNT AND THE BALANCE CHARGES RECEIVED FROM THE P ATIENTS WERE TRANSFERRED TO THE ACCOUNT OF THE ASSESSEE TRUST. WE ALSO FIND NO MERIT IN THE OBJECTION OF ASSESSING OFFICER THAT DR. KANDEKA R HAD SHIFTED HIS PRIVATE PRACTICE TO THE TRUST HOSPITAL. LOOKING AT THE REMUNERATION GENERATED BY DR. KANDEKAR FOR THE ASSESSEE TRUST, I T COULD NOT BE ESTABLISHED THAT HE WAS DOING ANY PRIVATE PRACTICE AT THE PREMISES OF THE TRUST HOSPITAL. ANOTHER OBJECTION OF THE ASSESSIN G OFFICER WAS VIS--VIS THE CLAIM OF EXPENDITURE OF ASSOCIATED DOCTORS BY D R. KANDEKAR IN HIS RETURN OF INCOME, AGAINST HIS CONSULTANCY CHARGES, IT WAS EXPLAINED BY THE ASSESSEE BEFORE ASSESSING OFFICER THAT THE SAID ASSOCIATE DOCTORS WERE ENGAGED BY DR. KANDEKAR FOR LOOKING AFTER HIS PATIENTS IN THE TRUST HOSPITAL AND HE WAS PAYING FOR THEIR SERVICES AND C LAIMING THE EXPENDITURE WITHOUT UTILIZING THE SERVICES OF DOCTO RS OF THE HOSPITAL TRUST. THE SAID CLAIM OF THE ASSESSEE HAS NOT BEEN REBUTTE D BY THE ASSESSING OFFICER AND THE CONTRARY INFERENCE DRAWN IN THIS RE GARD, CANNOT BE ACCEPTED. WE FIND NO MERIT IN THE OBJECTION OF THE ASSESSING OFFICER, WHERE DR. KANDEKAR ACTING AS MANAGING TRUSTEE OF TH E ASSESSEE TRUST HAD SUPERVISE THE ACTIVITIES OF THE TRUST AND HAD D EVOTED TIME FOR NOT ONLY 7 ITA NO.2328/PUN/2016 M/S. NOBLE FOUNDATION AND RESEARCH CENTRE THE MEDICAL CONSULTANCY, BUT ALSO FOR ADMINISTRATIV E WORK. THE ASSESSEE HAD ALSO MADE AVAILABLE THE SERVICES OF THE COMPANY CATHLAB (I) PVT. LTD. FOR THE PATIENTS OF TRUST HOSPITAL AT CONCESSIONAL RATES AND IN SUCH CIRCUMSTANCES, IT COULD NOT BE SAID THAT THE PROVIS IONS OF SECTION 13(1)(C) OF THE ACT ARE ATTRACTED. IN ANY CASE, UNDER SECTI ON 13(2)(C) OF THE ACT, THE PROVISION IS ATTRACTED WHERE THE AMOUNT PAID IS IN EXCESS WHAT MAY BE REASONABLY PAID FOR SUCH SERVICES. THE PROVISIONS OF SECTION 13(2)(C) OF THE ACT ARE NOT TO BE APPLIED WHERE ANY AMOUNT IS P AID BY WAY OF SALARY, ALLOWANCE OR OTHER TO ANY INTERESTED PERSON OUT OF RESERVES OF THE TRUST OR INSTITUTION, FOR SERVICES RENDERED BY SUCH PERSON T O TRUST OR INSTITUTION. THE CLAUSES ARE ATTRACTED IN CASE THE AMOUNT SO PAI D IS IN EXCESS OF WHAT MAY BE PAID FOR SUCH SERVICES. THE ASSESSING OFFIC ER HAS NOT ESTABLISHED THE CASE OF NON-REASONABLENESS OF THE AMOUNT PAID T O DR. KANDEKAR, WHO WAS THE INTERESTED PARTY IN THIS CASE AND IN THE AB SENCE OF THE SAME, THE PROVISIONS OF SECTION 13(1)(C) OF THE ACT ARE NOT T O BE APPLIED. CONSIDERING THE ABOVE, WE FIND THE CIT(A) FOLLOWED THE PRINCIP LES OF JUDICIAL DISCIPLINE IN COMPLIANCE WITH THE ORDER OF THE TRIBUNA L IN ASSESSEES OWN CASE. THUS, WE UPHOLD THE ORDER OF TH E CIT(A) AS FAIR AND REASONABLE. ACCORDINGLY, THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON 03 RD DAY OF AUGUST, 2018. SD/- SD/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) /JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 03 RD AUGUST, 2018. / COPY OF THE ORDER FORWARDED TO : / BY ORDER, //TRUE COPY// SENIOR PRIVATE SECRETARY , / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT(A)-10, PUNE 4. THE PR.CIT-9, PUNE 5. , , B BENCH PUNE; 6. / GUARD FILE.