ITAT MUMBAI BENCH ‘L’
Harvard Medical International Inc.
versus
Deputy Commissioner of Income-tax (International Taxation)
IT Appeal Nos. 791 & 1020 (Mum.) of 2008
[ASSESSMENT YEAR 2004-05]
FEBRUARY 22, 2013
Kanchan Kaushan and Dhanesh Bafna for the Appellant. Mahesh Kumar for the Respondent.
ORDER
Per Bench
These cross appeals are directed against the impugned order dated 12th November 2007, passed by the learned Commissioner (Appeals)-XXXIII, Mumbai, for the quantum of assessment passed under section 143(3) of the Income Tax Act, 1961 (for short “the Act”), for the assessment year 2004-05. Since the grounds raised by either party are inter-connected, therefore, as a matter of convenience, these appeals were heard together and are being disposed off by way of this consolidated order.
2. We first take up Assessee’s appeal in ITA No. 791/Mum./2008. The Assessee, vide grounds no.1, 2 and 3, has challenged the taxability of a sum of US$ 9,82,500 received by the Assessee from three parties namely Max India Ltd., Wockhardt Hospitals Ltd. and Sri Ramachandra Medical College & Research Institute.
3. Facts in brief:- The Assessee is a non-resident and is incorporated as Corporation under the laws of Massachusetts, U.S.A. It has been claimed that it is a non-profit educational entity which has been set-up with the following objections.
“Exclusively to perform internationally certain charitable and educational functions of and to carry out certain charitable and educational purposes of President and Fellows of Harvard College (Harvard) a charitable institution for higher education duly incorporated and existing under the laws of the commonwealth of Massachusetts, and otherwise to advance the charitable and educational objectives of Harvard’s Medical school (the Harvard Medical School), by assisting other medical schools, to provide high quality medical training and to enhance tie quality of patient care and research by teaching training and sharing medical and technological know-how with scientists and health care professionals in countries which may not have ready access to such information by participating in and promoting joint medical research initiatives throughout the words by assisting medical institutions throughout the words in various related administrative and management functions, and by providing such other charitable and educational services in the medical field to and for the benefit of Harvard Medical School and such other organizations affiliated with, or related to Harvard as Harvard may designate, provided that such organizations further the educational purposes of Harvard and are organizations described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended from time to time.”
4. In short, the brief areas of activities are – (i) leadership training; (ii) under graduate medical educational programme; (iii) continuing medical education; (iv) medical educational exchange programme; (v) clinical research training; and (vi) consulting services in relation to development of health system. In pursuance of its objects, the Assessee had entered into collaboration agreement with Max India Ltd., a company incorporated in India (for short “Max”), Wockhardt Hospitals Ltd. (for short “WHL”) and Sri Ramachandra Medical College & Research Institute (for short “SRMCRI”), wherein the Assessee was required to provide various services to these three parties. During the year, the Assessee has received following amounts:-
