Assistant eputy Commissioner of Income-tax, V. Lata Mangeshkar Medical Foundation, Pune

ITA 987/PUN/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7393 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 27-09-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 30-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIRUPAMA KOTRU
• Assessee Lawyers: SUNIL PATHAK
• Keywords: Depreciation
• Section: 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE , , . , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI D. KARUNAKARA RAO , AM . / ITA NO. 98 7 /P U N/20 1 5 / ASSESSMENT YEAR : 20 1 1 - 1 2 THE ASST. COMMISSIONER OF INCOME TAX , (EXEMPTION) CIRCLE, PUNE . / APPELLANT VS. LATA MANGESHKAR MEDICAL FOUNDATION, DEENANATH MANGESHKAR HOSPITAL, S.NO.8, 13+2 ERANDAWANE, NEAR MHATRE BRIDGE, PUNE 411004 . / RESPONDENT PAN: AA ATL1944N / APPELLANT BY : MS. NIRUPAMA KOTRU / RESPONDENT BY : SHRI SUNIL PATHAK / DATE OF HEARING : 27 .0 9 . 201 7 / DATE OF PRONOUNCEMENT: 29 .0 9 . 201 7 / ORDER PER SUSHMA CHOWLA, JM: THE APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER OF CIT(A) , PUNE - 10, DATED 0 1 .0 4 .2015 RELATING TO ASSESSMENT YEAR 20 1 1 - 1 2 AGAINST ORDER PASSED UNDER SEC TION 14 3 (3) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2 . THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. WHETHER IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) GROSSLY ERRED IN HOLDING THAT THE ASSESSEE IS ENTITLED TO EXEMPTION UNDER SECTION 11 OF THE INCOME TAX ACT, 1961? 2 ITA NO. 987 /P U N/201 5 LATA MANGESHKAR MEDICAL FOUNDATION 2. WHETHER I N THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE L D. CIT(A) GROSSLY ERRED IN FAILING TO APPRECIATE THE VOLUMINOUS DATA AND EVIDENCES GATHERED AND USED BY THE ASSESSING OFFICER WHICH WOULD CLEARLY ESTABLISH THAT THE ASSESSEE WAS RUNNING ITS HOSPITAL, CANTEEN AND OTHER ACTIVITIES ALONG COMMERCIAL LINES, AND, THEREFORE, COULD NOT BE TREATED AS PURSUING CHARITABLE OBJECTS? 3. WHETHER IN THE FACTS AND IN THE CIRCU MSTANCES OF THE CASE AND IN LAW, THE L D. CIT(A) GROSSLY ERRED IN DILUTING THE CONCEPT OF CHARITY BEYOND RECOGNITION AND IN NOT TAKING ANY NOTE OF THE SPIRIT UNDERLYING THIS CONCEPT OF CHA RI TY RECOGNITION AND IN NOT TAKING ANY NOTE OF THE SPIRIT UNDERLYING THIS CONCEPT AS USED IN THE INCOME TAX ACT, 1961? 4. WHETHER IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) GROSSLY ERRED IN HOLDING THAT THE ASSESSEE CANNOT BE CONSIDERED TO HAVE VIOLATED THE PROVISIONS OF SECTION 13(1)(C) OF THE ACT? 5. WHETHER IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) GROSSLY ERRED IN ROUTINELY DISMISSING THE INSTANCES OF VIOLATIONS OF SECTION 13(1)(C) BROUGHT OUT IN THE ASSESSMENT ORDER, PARTICULARLY WITH REGARD TO THE UNJUSTIFIABLE PAYMENTS MADE BY THE ASSESSEE TO MRS. MEENA KELKAR AND MRS. BHARTI MANGESKAR? 3. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF CIT(A) IN ALLOWING EXEMPTION UNDER SECTION 11 OF THE ACT TO THE ASSESSEE TRUST. 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE WAS ENGAGED IN RUNNING HOSPITAL UNDER THE NAM E AND STYLE DEENANATH MANGESHKAR HOSPITAL AT ERANDWAN, PUNE. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD DECLARED TOTAL RECEIPTS OF RS.159.40 CRORES. THE ASSESSEE TRUST WAS REGISTERED UNDER SECTION 12A OF THE ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT THE TOTAL RECEIPTS INCLUDED CANTEEN RECEIPTS OF RS.32.76 CRORES AND OTHER INCOME OF RS.1.08 CRORES. THE ASSESSING OFFICER ALSO NOTED THAT THE ASS ESSEE WAS RUNNING THE HOSPITAL WITH PROFIT MAKING MOTIVE WHICH WAS EVIDENT FROM THE SURPLUS GENERATED AFTER DEPRECIATION AT RS.21.41 CRORES. THE ASSESSEE HAD ALSO INCURRED CERTAIN EXPENDITURE ON THE RELATIVES OF THE TRUSTEES. IN VIEW THEREOF, EXEMPTION C LAIMED UNDER SECTION 11 OF THE ACT WAS DENIED TO THE ASSESSEE AND THE ENTIRE SURPLUS WAS BROUGHT TO TAX. 3 ITA NO. 987 /P U N/201 5 LATA MANGESHKAR MEDICAL FOUNDATION 5. THE CIT(A) FOLLOWING HIS ORDER FOR THE EARLIER YEARS ALLOWED THE CLAIM OF ASSESSEE AND HELD THE ASSESSEE ENTITLED TO CLAIM EXEMPTION UNDER SECTION 1 1 OF THE ACT. SIMILARLY, THE ISSUE REGARDING VIOLATION OF PROVISIONS OF SECTION 13(1)(C) OF THE ACT IN RESPECT OF PAYMENTS MADE TO MRS. MEENA KELKAR AND MRS. BHARTI MANGESKAR WAS ALSO ALLOWED IN VIEW OF SIMILAR ISSUE RAISED IN EARLIER YEARS. 6. THE REV ENUE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 7. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE AT THE OUTSET POINTED OUT THAT THE ISSUE IN THE PRESENT APPEAL IS SQUARELY COVERED BY THE ORDERS OF TRIBUNAL. HE REFERRED TO THE ORDER OF TRIBUNAL DA TED 15.04.2016 RELATING TO ASSESSMENT YEARS 2008 - 09 AND 2009 - 10 IN ITA NOS.2046/PN/2012 AND 761/PN/2013. HE FURTHER POINTED OUT THAT THE SAID ISSUE HAS ALSO BEEN FOLLOWED IN ASSESSEES OWN CASE IN ITA NO.712/PUN/2015 , RELATING TO ASSESSMENT YEAR 2010 - 11, ORDER DATED 23.06.2017. 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HAND, PLACED RELIANCE ON THE ORDER OF ASSESSING OFFICER. 9. WE FIND THAT THE ISSUE OF DENIAL OF CLAIM OF EXEMPTION UNDER SECTION 11 OF THE ACT HAS BEEN DELIBE RATED UPON BY THE TRIBUNAL IN ASSESSEES OWN CASE WITH LEAD ORDER IN ASSESSMENT YEAR 2008 - 09 AND THE SAID PROPOSITION HAS BEEN FOLLOWED IN LATER YEARS. THE RELEVANT FINDINGS OF THE TRIBUNAL ARE IN PARAS 48 TO 62 OF ORDER DATED 15.04.2016. THE SAID FINDIN GS OF THE TRIBUNAL ARE BEING REFERRED TO BUT ARE NOT BEING REPRODUCED FOR THE SAKE OF BREVITY. HOWEVER, FOLLOWING THE SAME PARITY OF REASONING, WE UPHOLD THE ORDER OF CIT(A) AND HOLD THAT THE ASSESSEE IS ENTITLED TO 4 ITA NO. 987 /P U N/201 5 LATA MANGESHKAR MEDICAL FOUNDATION CLAIM THE EXEMPTION UNDER SECTION 11 OF THE ACT. FURTHER, WE ALSO HOLD THAT THERE IS NO VIOLATION OF PROVISIONS OF SECTION 13(1)(C) OF THE ACT. ACCORDINGLY, THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE DISMISSED. 10 . IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED ON THIS 29 TH DAY OF SEPTEMBER , 201 7 . SD/ - SD/ - ( D.KARUNAKARA RAO ) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 29 TH S EPTEMBER , 201 7 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) , PUNE - 10; 4. THE CIT ( EXEMPTION), PUNE . 5. , , / DR B , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , //TRUE COPY// / SR. PRIVATE SECRETARY , / ITAT , PUNE