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2009 (3) TMI 233 - AT - Income TaxBenefits of sections 11 and 12 - Free and subsidized treatment only given to the relatives/friends of doctors/employees of the hospital - The solitary grievance of revenue is that ld. CIT(A) has erred in directing AO to allow benefits of sections 11 and 12 - assessee enjoying status of a scientific research center within the meaning of section 35(1)(ii) - In earlier as well as subsequent assessment years benefit of sections 11 and 12 were granted to the assessee - In present year such benefit has been denied to the assessee by AO. HELD THAT:- We have perused that list available. In this list name of 443 indoor patients are available. The patients have came from far flung areas also from Uttar Pradesh, Punjab, Haryana and Himachal Pradesh. From the list it is not discernible as to how AO has considered them as employees or relatives of employees. We could understood the stand of AO if he would have make out a case that assessee is applying its income for any other purpose than the charitable purpose. As rightly observed by the ld. CIT(A) that profitability is not the sole criteria to judge the charitable nature of a society. In a charitable activity incident of profit can be there but that would not goad any quasi-judicial authority to say that society ceases to be a charitable society. AO fails to point out any defects in the objects of society or in the means of achieving those objects. His only area of grievance is that income is resulting to the society by carrying out such activity. But again he fails to take into consideration that such income was only applied for the purpose of charity. AO also pointed out that assessee has entered into contracts with the doctors in such a way that the hospital should not suffer any loss. In our opinion from those contracts nothing adverse can be drawn against the assessee because in order to provide best facilities assessee is supposed to keep best doctors on its panels. Similarly it has to see that hospital should able to run its activity. If it starts loosing the resources then its existence would be in dark. Therefore, taking into consideration all the material on record and the findings recorded by the CIT(A) we do not find any error in the order of ld. First Appellate Authority. In the result, the appeal of the revenue is dismissed.
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