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| The Tax Publishers2020 TaxPub(DT) 1466 (Bom-HC) INCOME TAX ACT, 1961
Section 11
AO was not justified in treating pharmacy store of assessee-hospital as a separate business entity and to hold the surplus amount accrued there from as business income under section 11(4A) because pharmacy store was ancillary to main object of running hospital.
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Charitable trusts - Exemption under section 11 - AO treated pharmacy store of assessee-hospital as a separate business entity -
AO alleged that in terms of section 11(4A) considering nature, volume, frequency and surplus of transactions of pharmacy store, it was systematic business activity of assessee. Thus, AO declined to consider it to be incidental to charitable activity of assessee trust. Held: Pharmacy store of assessee was ancillary to the main object of running hospital. Therefore, income accrued there from was incidental to the dominant object of assessee i.e., running of the hospital. Thus, AO was not justified in treating pharmacy store of assessee as a separate business entity and to hold the surplus amount accrued there from as business income under Section 11(4A).
REFERRED :
FAVOUR : In assessee's favour
A.Y. :
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