Ita/56/2002 Of The Commissioner Of Income Tax, Cochin v. M/S.luke Memorial Eye Hospital,Perumbavo

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE T.R.RAMACHANDRAN NAIR MONDAY, THE 11TH FEBRUARY 2008 / 22ND MAGHA 1929 ITA.No. 56 of 2002() -------------------- ITA.160/COCH/1992 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/APPELLANT: --------------------------- THE COMMISSIONER OF INCOME TAX, COCHIN. BY ADV. SRI.P.K.R.MENON(SR.),SR.COUNSEL FOR IT SRI.GEORGE K. GEORGE, SC FOR IT RESPONDENTS: RESPONDENT: ------------------------ M/S. LUKE MEMORIAL EYE HOSPITAL, PERUMBAVOOR. BY ADV. SRI.C.KOCHUNNY NAIR SRI.DALE P.KURIEN THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 11/02/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR &T.R.RAMACHANDRAN NAIR, JJ. .................................................................... ....................................................................Dated this the 11th day of February, 2008. JUDGMENT C.N.Ramachandran Nair, J. In the appeal filed by the Revenue, the question raised is whether theexemption granted to the respondent-assessee under Section 10(22A) of theIncome Tax Act is correct or not. The respondent which is running ahospital is assessed as association of persons by the Assessing Officer afterrejecting the claim of exemption. Even though assessee has obtainedregistration under Section 12A of the Income Tax Act, exemption wasdeclined by the Assessing Officer for the reason that assessee spentsubstantial amount during the previous year in the construction of a buildingwhich will ultimately go to the owner of the land as the lease is only for aperiod of thirty years. We find from the orders of the authorities includingthat of the Assessing Officer that relevant details are not considered whileconsidering the claim of exemption. The Tribunal has just followed thedecision of the Supreme Court which is not squarely applicable to the factsof this case. We feel a detailed enquiry is called for by the AssessingOfficer with reference to the operations of the assessee in the previous years and subsequent years and verify whether the claim of free or concessionalmedical relief provided to patients is genuine or not. If the net income isinvested in building and if the building ultimately go to the land owner, thenwe do not think such expenditure calls for deduction under Section 10(22A)of the Income Tax Act. As facts are not considered in detail, we set asidethe order of the Tribunal confirming Commissioner's order and remit thematter to the Assessing Officer. Fresh orders are to be passed by theAssessing Officer only after hearing the assessee. The appeal is disposed ofas above. C.N.RAMACHANDRAN NAIRJudge pms T.R.RAMACHANDRAN NAIRJudge