Bhatia General Hospital Vs DCIT (Exemption) (ITAT Mumbai)
ITAT Mumbai held that income from pharmacy and chemist division cannot be treated as business income from separate and independent activity. Thus, since pharmacy is an integral part of dominant purpose of hospital benefit u/s. 11(1) duly admissible.
Facts- This appeal is directed against the order dated 27/10/2023 passed by National Faceless Appeal Centre, Delhi (NFAC) for Assessment Year 2014-15. Vide this order, CIT(A) has confirmed the addition made by AO in his order dated 13/12/2016 to the tune of Rs. 15,08,18,086/- of the assessee hospital considering the pharmacy business income of the assessee hospital as taxable income by applying the provisions of section 11(4A) of the Act.
Conclusion- Held that the appellant / assessee fulfills all the requirements which necessitates the running of pharmacy and chemist division in the hospital to achieve the dominant purpose of the trust for which the revenue authority have given approval under section 12A of the Act to the assessee hospital and, therefore, the assessee hospital is entitled for the benefit under section 11(1) of the Act and the income from the pharmacy and chemist division of the assessee cannot be treated as business income from a separate and independent activity carried out by the assessee. Thus, on the basis of summarized grounds the points of determination enumerated in the beginning of the order are accordingly decided in the affirmative and in favour of the assessee. We accordingly direct the Assessing Officer to delete the addition. So the grounds raised by the assessee are accordingly allowed.
