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18.07.2014 - Voice of CA presents - Updates
Friday, July 18, 2014

  I. Today's Headlines:    

  1. FM Jaitley presents Rs 36,776 crore Delhi budget  (Click for detail)

  2. CBDT sets up Panel to Reduce Litigation at Appellate Forums  (Click for detail)

  3. MCA Cir.: Clarifications on matters relating to Related Party Transactions  (Click for detail)

  4. RBI Cir.: Liberalised Remittance Scheme (LRS) for resident individuals-Increase in the limit from USD 75,000 to USD 125,000  (Click for detail)

  5. SEBI issues draft norms for setting up infrastructure investment trusts to gain more investments  (Click for detail)

II.  Direct Tax Case Laws:

1.  Franciscan Sisters of St. Joseph Society Vs. Joint Commissioner of Income Tax, I.T.A No. 1897 of 2013, Date of Order: 06.01.2014, ITAT - Chennai

Relief u/s 11 is available to hospital in respect of income from pharmacy run by it with in the hospital premises.

The first item so considered by the assessing authority is the receipts from pharmacy section. It is to be seen that assessee is running a full-fledged general hospital at St. Thomas Mount. The assessing authority has, no doubt, accepted the charitable nature of activities carried on by the assessee-society in respect of that hospital. The assessee is also running a dispensary. Number of patients are visiting the hospital and dispensary on a daily basis. Patients are admitted as in-patients and they are also treated as out-patients. For all the in-patients undergoing treatment in the hospital, medicines are delivered from the pharmacy run by the assessee-society.

In respect of out-patients also, most of the patients purchase medicine from the pharmacy run by the assessee. A few of the out-patients might purchase medicines from outside. Likewise, few from the public living nearby to the hospital may purchase medicines from the pharmacy run by the assessee-society. The purchase of medicines by the public is absolutely negligible. That negligible amount of sales, if any, cannot decide the nature of activities carried on by the assessee in running the pharmacy in its hospital premises. The pharmacy is not situated in any commercial area or outside the hospital compound with the intention to invite the public at large to purchase medicines from the pharmacy run by the assessee-society. The assessee-society is running the pharmacy within the premises of the hospital and as part of the hospital itself. It is clear that the pharmacy is run by the assessee-society only for the purpose of running the hospital. The hospital cannot be run without a pharmacy attached to it. If an assessee wants to run a hospital, running of the pharmacy is also a must. Therefore, running of the pharmacy by the assessee-society is not an activity carried on by the assessee incidental to the running of the hospital; but, on the other hand, it is an integral part of the hospital run by the assessee.

(Please click here for judgment)

2.  JHPL Holding (P) Ltd Vs. Asstt. Commissioner of Income Tax, I.T.A No. 6472/Del/2012, Date of Order: 04.07.2014, ITAT - Delhi

When appeal of the assessee has been admitted in the Hon’ble High  Court and substantial question of law has been framed then the issue becomes debatable and in this situation no penalty u/s 271(1)© of the Act is not leviable on the assessee.

(Please click here for judgment)

3.  ITO Vs. Karan Mehra, I.T.A No. 2075/Del/2011, Date of Order: 04.07.2014, ITAT - Delhi 

The Ld AO has no right to oppose additional evidence, once the same are admitted by CIT (A), he can only adversely commet upon the merits of additional evidene as to why & how the same are not applicable to the given set of facts. Moreover in case of regular deposits & withdrawalas from bank account both deposit and withdrawals has to be taken in to account for making addition and not merely deposits i.e. Peak credit theory.     

(Please click here for judgment)

 Golden Rules:

  "Three things to get success:
1.Know more than others
2.Work more than others
3.Expect less than others"


  Thanks & Regards


Voice of CA 

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