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. .................................................................... I.T.Appeal No.56 of 2002 .................................................................... 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 the exemption granted to the respondent-assessee under Section 10(22A) of the Income Tax Act is correct or not. The respondent which is running a hospital is assessed as association of persons by the Assessing Officer after rejecting the claim of exemption. Even though assessee has obtained registration under Section 12A of the Income Tax Act, exemption was declined by the Assessing Officer for the reason that assessee spent substantial amount during the previous year in the construction of a building which will ultimately go to the owner of the land as the lease is only for a period of thirty years. We find from the orders of the authorities including that of the Assessing Officer that relevant details are not considered while considering the claim of exemption. The Tribunal has just followed the decision of the Supreme Court which is not squarely applicable to the facts of this case. We feel a detailed enquiry is called for by the Assessing Officer with reference to the operations of the assessee in the previous years 2 and subsequent years and verify whether the claim of free or concessional medical relief provided to patients is genuine or not. If the net income is invested in building and if the building ultimately go to the land owner, then we 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 aside the order of the Tribunal confirming Commissioner's order and remit the matter to the Assessing Officer. Fresh orders are to be passed by the Assessing Officer only after hearing the assessee. The appeal is disposed of as above. C.N.RAMACHANDRAN NAIR Judge T.R.RAMACHANDRAN NAIR Judge pms