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TMI Blog2014 (9) TMI 829X X X X Extracts X X X X X X X X Extracts X X X X ..... n be best done by the AO in reassessment proceedings - Thus, it cannot be said that the notices are without jurisdiction – there is no reason to entertain the present petition and injunct the AO from proceeding further with the notices –Decided against assessee. - Writ Petition No.1197 of 2014, Writ Petition No.1198 of 2014 - - - Dated:- 25-8-2014 - M. S. Sanklecha And N. M. Jamdar,JJ. For the Petitioner : Mr. S. C. Tiwari with Ms. Natasha Mangat For the Respondents : Ms. Padma Divakar with Mr Tejveer Singh ORDER P. C. These two petitions are directed against two impugned notices both dated 28 March 2013 issued under Section 148 of the Income Tax Act, 1961 ( the Act ) seeking to reopen the assessment for Assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is incidental to the attainment of the objectives of the trust or, as the case may be, institution and separate books of account are maintained by such trust or institution in respect of such business. 2. During assessment proceedings for AY 2010-11 new facts that have to come to notice that Assessee runs a pharmacy store in its hospital and it has turnover of ₹ 37,29,09.641. Assessee sell drugs and medicine to the patients through this pharmacy store. It has got a surplus of ₹ 12,77,07,089 on the transaction of pharmacy store. 3. Profit of pharmacy store comes at 34.24% of its turnover. Turnover of pharmacy store is around 14% of total hospital collections from inpatient and out patient charges. 4. Though assessee cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d income expenditure statement in respect of pharmacy store while filing the return of income as it does in case of its other activities. The same has not complied with by assessee trust. Thus it is clear that assessee has not maintained separate books of accounts in respect of pharmacy store and has not complied with that particular condition as required under the law. 9. In view of above detailed discussion it is clear that surplus of ₹ 12,77,07,089 out of pharmacy store is liable to be treated as business income under Section 11(4A) separately and taxed accordingly. 10. This practice of running pharmacy store business without maintaining separate books of accounts for the same are required u/s.11(4A) is being followed by asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cy store which is run by it is utilized to serve the dominant object of the Trust i.e. running hospital and treating patients. In any event it is submitted that for Assessment Year 2009-10, the Chief Commissioner of Income Tax has granted the petitioner approval under Section 10(23)(via) of the Act by order dated 7 April 2011. At that time the Chief Commissioner of Income Tax considered the activity of the petitioner in running the pharmacy store and granted approval. In view of the above, it is the submission of the petitioner that the impugned notices are without jurisdiction and need to be set aside. 7. As against the above Mr. Tejveer Singh reiterates the reasons mentioned in the impugned notice as well as order disposing of the obje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bjects of the petitioner, the petitioner would still have to satisfy the provisions of Section 11(4A) of the Act. All these issues requires factual determination which can be best done by the Assessing Officer in reassessment proceedings. Thus, it cannot be said that the impugned notices are without jurisdiction. 9. In the above view, we see no reason to entertain the present petition and injunct the Assessing Officer from proceeding further with the impugned notices. The petitioner is at liberty to raise all contentions before the Assessing Officer during the reassessment proceedings. 10. In respect of the petitioner's application for grant of approval under Section 10(23C)(via) of the Act for the Assessment Year 2006-07 and 2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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