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TMI Blog2017 (2) TMI 1105X X X X Extracts X X X X X X X X Extracts X X X X ..... rounds: 1. "Whether on the facts and circumstances of the case and in law, the Ld. CIT(A), Mumbai, is justified in granting exemption u/s. 11 of the Income Tax Act, 1961? 2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is justified in allowing the claim of the assessee for exemption u/s 11 ignoring the facts that the Assessing Officer in his order has pointed out that assessee runs a pharmacy store in its hospital for profit motive. Profit of pharmacy stores comes to Rs. 14,11,22,23 1/- ? 3. Whether, on the facts and in the circumstances of the case and in law, the Ld. CIT(A), Mumbai, is justified in allowing the claim of the assessee for exemption u/s 11 ignoring the fact that assessee has not maintain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess and earning of profit through running of pharmacy store. However, the AO was not satisfied with the submissions of the assessee, therefore, surplus of Rs. 14.11 crores earned by the pharmacy store was treated as business income u/s 14A of the Act. It was also observed by the AO that no separate books of accounts were maintained by the assessee with respect to pharmacy store and thus, the assessee failed to comply with conditions as required under the law. This profit earned by the pharmacy store was liable to the taxed separately. 4. Being aggrieved, the assessee filed before Ld. CIT(A) wherein detailed submissions were made reiterating the arguments made before the AO. Ld. CIT(A) considered the submissions of the assessee and relying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sis of objective clause of the trust rather than bringing on record any such material which could show that the pharmacy has been run as a business venture, separate and independent of hospital. Under the circumstances, the finding given by AO is erroneous. 7.2 It is also on record that the appellant has been granted approval u/s. 10(23C)(via) of the 1. T. Act with effect from A. Y. 2009-10 which has been agitated and incorporated in Ground No. 2 of appeal. The Id. CCIT during the proceedings u/s. 10(23C) is stated to have looked into the aspect of running of said pharmacy in the case of the appellant and had granted approval af ter satisfying himself on this issue. The approval granted by the Hon. CCIT u/s. 10(23C) (via) vide approval da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... axability of surplus of pharmacy is held as erroneous and ordered to be deleted." 6.3 The facts and circumstances on this issue, being simi lar to the assessment year 2010-11, it is held that the Ground No. 3 of appeal is liable to be allowed for the reasons as discussed above. Therefore, Ground No.3 of appeal is allowed and the addition made by the A.O u/s. 11(4) of the I.T. Act, 1961 amounting to Rs. 14,11,22,231/- relating to surplus of pharmacy store is directed to be deleted." 5. Being aggrieved with the order of Ld. CIT(A), the Revenue has filed an appeal before the tribunal. 6. During the course of hearing before us, Ld. DR vehemently opposed the order of the AO. It was submitted by the Ld. DR that Ld. CIT(A) did not verify ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that Ld. CIT(A) has reversed the order of the AO and allowed the relief of the assessee relying upon his own order for earlier year and decision of Hon'ble Bombay High Court in the case of Baun Foundation Trust (supra). However, while deciding this issue, Ld. CIT(A) has not discussed at all actual facts of the case as were involved in the year before us. Therefore, we find it appropriate to send this appeal back to the file of Ld. CIT(A) who shall decide this appeal afresh after taking into account fact of this case more specifically on those issues as were raised by the Ld. DR before us. He shall also take into account, the decision relied upon by the Ld. Counsel before us, and adequate opportunity of hearing shall be given to the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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