2010 (2) TMI 1183

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..... were in furtherance of the charitable purpose for which the Trust has been constituted. Consequently, the amount of ₹ 12.19 crores towards capital assets is correctly regarded as expenditure incurred in furtherance of the charitable purposes of the Trust. Hence, the Tribunal has correctly come to the conclusion that the net profit of the Trust was not 16.95% as was the reasoning of the AO, but would be between 6 and 7%. The grant of exemption u/s 11 for the assessment year in question was in order. In the circumstances, there is no merit in the appeal which does not raise any substantial question of law. The appeal is dismissed. - Dr. D. Y. Chandrachud And J. P. Devadhar, JJ. For the Petitioner : Suchitra Kamble For the .....

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..... in question were ₹ 115.60 crores whereas the expenses incurred were in the amount of ₹ 96.01 crores. The Assessing Officer was of the view that these expenses were purely administrative and were incidental to expenses incurred for the management of the hospital. The difference between the receipts and the expenses amounted to ₹ 19.59 crores. The assessee had claimed a capital expenditure of ₹ 12.93 crores which was expended towards the acquisition of assets for the hospital. The Assessing Officer held that the expenses as listed do not spell out any charitable or philanthropic act on the part of the assessee. In appeal, the CIT (Appeals) noted that the main objective of the Trust as contained in Clause (3) of the .....

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..... l assets in the amount of ₹ 12.19 crores have been purchased and if these were to be taken into consideration, the rate of profit would work out to between 6% and 7% which is much lower than 15% statutorily allowable. In the circumstances, more than 85% of the funds were found to have been applied for charitable purposes. In the circumstances, the order of the CIT (Appeals) was upheld. The decision of the Tribunal cannot be faulted. Under Section 11(1)(a) income derived from property held under trust wholly for charitable or religious purposes, to the extent to which such income is applied to such purposes in India; and, where any such income is accumulated or set apart for application to such purposes in India, to the extent to wh .....

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