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2014 (2) TMI 1369 - AT - Income TaxExemption u/s 11 - Applicability of provisions of clause (via) of sub-section (23C) of section 10 - charitable activity u/s 2(15) - HELD THAT:- When we examine the provisions of section 10(23C) and section 11, we find that the Provisions of section 11 read with section 2(15) are general provisions referring to medical relief in general whereas the provisions of section 10(23C)(vi) are specific provisions regarding hospital. Therefore the income of a hospital has to be considered for exemption u/s 10(23C)(via) as per specific provisions of that section and not u/s 11 read with section 2 (15) being general provisions for all types of medical relief. For all other assessees providing medical relief excluding running of hospital, the claim of exemption should be considered u/s 11 of the Act. As per the judgment of Hon'ble Kerala High Court SAHRUDAYA HOSPITAL [2010 (10) TMI 844 - KERALA HIGH COURT] cited by learned A.R. of the assessee, we have seen that this judgment is in fact rendering help to the Revenue because when the hospital has not obtained approval u/s 10(23C)(via) of the Act, the income of the hospital is taxable as can be inferred from this judgment. In the present case, it is factual position as is admitted by learned A.R. of the assessee that the assessee is not running any other charitable activity and, therefore, as per this judgment cited by learned A.R. of the assessee, it has to be held that the profit from running of hospital is to be held to be taxable because the same has not obtained approval u/s 10 (23C) (via) and since the assessee is not running any other charitable activity, such income of the hospital cannot be claimed to be exempt u/s 11 for utilization of the income from hospital in respect of other charitable activities. Hospital was being run by the "appellant" for profit - Exemption for a hospital has to be exempt only under the provisions of section 20(23C)(via) of the Act and not u/s 11 and since the assessee has not obtained approval u/s 10(23C)(via) of the Act, there is no merit in these grounds of the assessee and the same are accordingly rejected. Claim for exemption of the surplus - As decided in ADITANAR EDUCATIONAL INSTITUTION VERSUS ADDITIONAL COMMISSIONER OF INCOME-TAX [1997 (2) TMI 3 - SUPREME COURT] after meeting the expenditure, if any surplus results incidentally from the activity lawfully carried on by the educational institution, it will not cease to be one existing solely for educational purposes since the object is not one to be one existing solely for educational purposes since the object is not one to make profit. The decisive or acid test is whether on an overall view of the matter, the object is to make profit. In evaluating or appraising the above, one should also bear in mind the distinction/difference between the corpus, the objects and the powers of the concerned entity. Treating the utilization in acquisition of fixed assets as application of income - Since it is held that the assessee is not eligible for exemption either u/s 10(23C)(via) because the assessee could not obtain the approval and the assessee cannot get exemption u/s 11, this ground of the assessee has no merit and therefore, the same is rejected.
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