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TMI Blog2011 (7) TMI 795X X X X Extracts X X X X X X X X Extracts X X X X ..... 5/- as not covered by provisions of Section 10(23C)(iiiae) of I.T. Act for the reason that Medical College was not started in absence of permission from MCI. He also therefore, did not consider the exemption u/s 11 of the Income Tax Act though the assessee Trust is registered u/s 12A of I.T. Act." 2.2 The assessee trust is running a Hospital and Medical College in the name and style 'National Institute of Medical Sciences (NIMS). During the previous year relevant to the assessment year under consideration, the activities of the medical college were not started. The Trust has shown the income from donation and Fee charged from medical treatment from the patients. It was stated before the AO that the fees were charged with the object to run ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. It was therefore, argued that the trust is entitled for exemption u/s 10(23C)(iiia3) of the Act. 2.5 On the other hand, the ld. DR drew our attention to Section 10(23C)(iiiae) of the Act in which it has been mentioned that the trust should exceed solely for philanthropic purposes. 2.6 We have heard both the parties. It is an undisputed fact that Section 10(23C)(iiiae) of the Act is applicable in case the correct annual receipts of such hospital or institution did not exceed Rs. 1.00 crore. The limit has been mentioned and Rule 2 BC which states that amount of annual receipt should not exceed Rs. 1.00 crore. The ld. AR has contended that the donations received towards the corpus of the trust cannot be considered for considerin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fiction that the assessee must be deemed to have continued the business. The fiction is created for a limited purpose and it is applicable only for that purpose. Hon'ble Apex Court in the case of Apollo Tyres Ltd. v. CIT [2002] 255 ITR 273/122 Taxman 562 had an occasion to consider the deeming provisions in UTI Act that UTI deemed to be 'Company' and income distributed to unit holder is dividend for the purpose of income tax. Thus the deeming fiction cannot be extended to hold that the units were shares. Hence, explanation to Section 73 was held as not applicable as at that relevant time as it was applicable only to the shares. Hon'ble Apex Court in the case of CIT v. Ajax Products Ltd. [1965] 55 ITR 741 had an occasion to consider the sco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that since the exemption is not being given in Section 10(23C)(iiiae) and hence no benefit can be given u/s 11 to 13 of I.T. Act. We hold that if the assessee is not entitled to exemption u/s 10(23C)(iiiae) then it will not be a bar in not claiming benefit u/s 11 to 13 of I.T. Act. The AO will give benefit to the assessee. 3.1 The second ground of appeal of the assessee is that the ld. CIT(A) has erred in sustaining the disallowance of depreciation on the medical college building on account of passive use which could not be started in absence of permission from Medical Council of India. 3.2 During the previous year relevant to assessment year under consideration, the assessee has not got the approval for the medical college. The passive ..... X X X X Extracts X X X X X X X X Extracts X X X X
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