MASINA HOSPITAL TRUST,MUMBAI vs. COMMISSIONER OF INCOME TAX (EXEMPITONS), MUMBAI

PER OM PRAKASH KANT, AM

This appeal by the assessee is directed against order dated
30.09.2024 passed by the Ld. Commissioner of Income-tax
(Exemptions), Mumbai [in short ‘the Ld. CIT(E)’] rejecting the application of the assessee seeking approval u/s 80G of the Income- tax Act, 1961 (in short ‘the Act’).

2019-20
2020-21
2021-22
2022-23
2023-24
From the abo paying intere since FY 201
4,53,91,500/
regarding pa assessee too
2018-19 whe
18.01.2022 a made on 19.0
taking such a purpose whi
18.01.2022 a the assessee cannot be ju payment on l course of tim charitable pu assessee trus
(Rs.
7,95,00
6,50,00,000/
the assessee dated 23.09.2
logic to unde amount more purpose was kept paying i interest beari in due period repayable on provision.It pr and Company with an intent
8. It is eviden the intention o rent liability b its related pa
Even if it is a the related pa mentioned ta
ITA

Interest on loan
43,56,904
Interest on loan
91,42,500
Interest on loan
91,42,500
Interest on loan
91,42,500
Interest on loan
91,42,500
Total
4,53,91,089
ove table, it can be seen that the assess st to M/s. Shapoorji Pallonji and Compa
18-19 and total interest paid till FY 202
-. However, the order from the Colle ayment of rent was issued on 18.01
k the loan from its related party way ereas the need to pay the rent arose as stated by the assessee itself in its 09.2024. There does not appear any rat a huge amount of loan in FY 2018-19 or ich would arise only after 3-4 year and which kept incurring a hefty amount o trust. For a charitable entity like the a ustified to make expenses in the form loans which is to be used for rent paym me whereas the same money could be urpose.It is noticeable that total loan ta st for the purpose of paying rent is Rs. 14,
0,000/- interest bearing at 11.5%
- interest free) whereas the total rent to e is Rs. 10,42,08,629/-as per assessee
2024 summarised at para no. 4.It is ag erstand why the assessee would und than the amount of outstanding rent to b only for payment of outstanding rent. T interest on the said loan (part of the loan ing) whose purpose was to pay the outs d. It is also pertinent to mention that n demand i.e. without any time bo roves that the related party i.eM/s. Shap y Pvt. Ltd. Has deployed its excess funds tion to earn interest income.
nt from the above-mentioned facts and dis of the trust behind taking the loan was n but to apply the funds of the trust for th arty in the form of payment of interest agreed that the actua purpose of the loan arty is to pay the outstanding rents as pe able no. 1 and 2, there is no apparen
Masina Hospital Trust
3
A No. 5366/MUM/2024
4
1,96,680
0
5,27,961
0
8,18,191
0
9,14,250
0
4,49,258
9
31,97,189
see has been any Pvt. Ltd.
23-24 is Rs.
ector's office
1.2022. The back in FY e only from s submission tional behind r before for a rs i.e. from of interest for assessee's, it m of interest ment in future e utilized on aken by the ,45,00,000/-
%
and Rs.
o be paid by e's response again beyond dertake loan be paid, if its The assessee n which was standing rent this loan is ound return poorji Pallonji s in the Trust scussion that not to pay the he benefits of on the loan.
n taken from er the above- nt rationality behind taking year and pay the assessee used for p charitable pu
3. We have heard the relevant materia regarding the violatio that where any prop benefit of the related registration including is found that the ass bearing interest @ 1
Pvt. Ltd. and loan of The contention of t financial of the asse were taken to comp making rent payme period. There was n take a loan and sin provisions of the se could not have bee interest was charged for the charitable ne taking loans for the assessee provided a assessment year 201
ITA g the said loan 3-4 years prior to the act ying huge interest from its fund when th trust is to do charitable activities and paying interest could have been urposes.”
rival submissions of the parti als on record. The first issue on of section 13(2) of the Act w perty or income of the trust is party, the assessee is not entitl g 80G of the Act. On verificatio sessee trust obtained loan of R
1.5% from M/s Shapoorji Pallo f Rs.6,50,00,000/- from individu the assessee that there was a essee since 2018-19 and there ply the the order of the Distri ent of Rs.10,42,08,629/- wi no option with the assessee oth nce it was a loan from a comp ection 186(7) of the Companie en given interest free to the d at the market rate. The funds eed of the trust and there was purpose of benefiting to its rel detailed financial position of t
8-19. Masina Hospital Trust
4
A No. 5366/MUM/2024
tual payment he purpose of d the money used for ies and perused e in dispute is which prescribe applied for the led for benefit of on of the facts it Rs.7,95,00,000/- onji & Company ual Mr. Pallonji.
a deficit in the efore, such loan ict Collector for thin stipulated herwise then to pany under the es Act, 2013, it trust therefore, s were obtained no intention of lated party. The the deficit since

Regarding the secon community, the asse the ‘Parsi’ Communit relevant chart is repr
Year
To 2019-20
2020-21
2021-22
2022-23
2023-24
3.1 In view of the a submitted that ratio
Community is negligi filed a bank stateme application for the ob
Book page 24 to 50. application and copy of the loan on expen first time before us
CIT(E) has pointed ou in the year under c from AY 2018-19 on loan had been availe in view of deficit in r crucial and importan the loans for incurrin we admit the docum
ITA nd issue of providing benefit essee filed a detailed chart of th ty benefited since year 2019-20
roduced as under:
otal Admission
Parsi Patients Admissions
6973
245
4786
279
5751
244
8087
309
7864
177
above chart, the Ld. counsel f o of the medical relief provide ible. Before us, the Ld. counsel ent reflecting the receipt of the bject of the Trust which are ava
A summary of the loan transa y of the general ledger showing nses incurred object of the trus as additional evidence. In th ut that liability of the payment o consideration whereas loans ha nwards but the assessee has ed for meeting charitable expen revenue. Since, the above docu nt for examining this issue of th ng expenses on charitable purp ments as additional evidence a Masina Hospital Trust
5
A No. 5366/MUM/2024
to a particular he percentage of 020 onward. The %
4%
6%
4%
4%
2%
for the assessee ed to the Parsi for the assessee e loan and their ailable on Paper action with their the application t has been filed e case, the Ld.
of the rent arose ave been taken contended that nses of the trust uments filed are he application of poses. Therefore, and restore the matter back to the afresh. As far as seco verify the percentage from the charitable a accordance with law.
4. In the result, statistical purposes.
Order pronoun (SANDEEP SING
JUDICIAL M
Mumbai;
Dated: 18/02/2025
Rahul Sharma, Sr. P.S.

Copy of the Order forward
1. The Appellant
2. The Respondent.
3. CIT
4. DR, ITAT, Mumbai
5. Guard file.

////

ITA file of the Ld. CIT(E) for decid ond issue is concerned, the Ld.
e of the persons of Parsi Comm activity of the assessee and dec the appeal of the assessee ced in the open Court on 18/0
d/- GH KARHAIL)
(OM PRAK
MEMBER
ACCOUNTA ded to :

BY ORDER

(Assistant Re

ITAT, Mu

Masina Hospital Trust
6
A No. 5366/MUM/2024
ding the matter
CIT(E) may also munity benefited cide the issue in is allowed for 02/2025. d/-
KASH KANT)
ANT MEMBER
R, gistrar) umbai