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7. Being aggrieved the assessee carried the matter to the Ld. CIT(A) and submitted as under:

The appellant is a Charitable Trust and is running a hospital to provide medical relief to the weaker section of the society and public at large. The Hospital was inaugurated by President of India on 7th July, 1983. In furtherance to its object and to cater to the requirements of modern day requirements of Medical treatment of the people, to have complete up gradation of the Hospital, the Trust approached Cygnus Medicare Pvt. Ltd. for providing their expertise and sharing of specialized knowledge in this regard and accordingly entered into an agreement with M/s Cygnus Medicare Private Limited (CMPL) vide Medical Service Agreement on 3rd day of June, 2013. The sole purpose of Medical Service Agreement was sharing of specialized knowledge and provisions for treatment of critical ailments for the society. In term of aforesaid agreement, Cygnus was to ensure that 8% of the Gross revenue collections was to be made available to the Trust on monthly basis and all expenses were to be incurred by Cygnus Medicare Pvt. Ltd. (CMPL) from operating bank A/c. In case found any shortfall to meet out all the operational expenses that shortfall shall be met by Cygnus Medicare Pvt. Ltd. (CMPL) only from its own resources. The gross receipts of the Trust during the year amounting to Rs.6,08,40,093/- and the Trust had applied Rs.61,01,4,602/- for revenue and capital expenditure of the Trust, a fact which is clear from the audited accounts. Thus it is crystal clear that Trust had spent excess money over the receipts which shown that Trust had no motive in earning of any profit from running the Trust and the sole aim was benefit of society at large. During the course of assessment proceedings the A.O. requisitioned for segregating Stand Alone Revenue receipts & Expenditures statement which were submitted and the same clearly reflects that as against total stand alone receipts/income of the Trust has applied more than 85% on the objects of Trust for charitable purposes. Further the body of the assessment order reveals that assessment has been framed on the basis of Stand Alone financial statements/calculation of income which is reproduced hereunder for ready reference :-

In addition to above facts stated it is worth consideration by your goodseif that the Trust's case for preceding year i.e A.Y. 2014-15 was assessed vide order dated 23/08/2016 and no such disallowance were made by AO whereas the facts & circumstances of the case was identical and dominant purpose of Trust was charitable within the meaning of section 2(15) of Income Tax Act. So the contention that the revenue contribution received from Cygnus Medicare Pvt. Ltd (CMPL) as income from House Property is not correct as these receipt has either been applied for revenue expenditure or capital expenditure on the object of the Trust for charitable purposes.

Appellant's Submission in respect of Income from property held under Trust amounting Rs. 32.89,114/-

The appellant is a Charitable Trust and is running a hospital to provide medical relief to the weaker section of the society and public at large. The Hospital was inaugurated by President of India on 7th July, 1983. In furtherance to its object and to cater the requirements of modern day requirements of Medical treatment of the people, to have complete up gradation of the Hospital, the Trust approached Cygnus Medicare Pvt. Ltd. for providing their expertise and sharing of specialized knowledge in this regard and accordingly entered into an agreement with M/s Cygnus Medicare Private Limited (CMPL) vide Medical Service Agreement on 3rd day of June, 2013. The sole purpose of Medical Service Agreement was sharing of specialized knowledge and provisions for treatment of critical ailments for the society. In term of aforesaid agreement, Cygnus was to ensure that 8% of the Gross revenue collections was to be made available to the Trust on monthly basis and all expenses were to be incurred by Cygnus Medicare Pvt. Ltd. (CMPL) from operating bank A/c. In case found any shortfall to meet out all the operational expenses, that shortfall shall be met by Cygnus Medicare Pvt. Ltd. (CMPL) only from its own resources. During the course of assessment proceedings the A.O. requisitioned for segregating Stand Alone Revenue receipts & Expenditures statement which were submitted and the same clearly reflects that as against total stand alone receipts/income of the Trust has applied more than 85% on the objects of Trust for charitable purposes. Further the body of the assessment order reveals that assessment has been framed on the basis of Stand Alone financial statements/calculation of income which is reproduced hereunder for ready reference :-

Hence the above table clearly reflects that the Trust has applied more than 85% of total receipt for charitable purposes.

In addition to above stated facts it is worth consideration by your goodself that the Trust's case for preceding year i.e Asstt. Year 2014-15 was assessed vide order dated 23/08/2016 and no such disallowance were made by AO whereas the facts & circumstances of the case was identical and dominant purpose of Trust was charitable within the meaning of section 2(15) of Income Tax Act. So the contention that the revenue contribution received from Cygnus Medicare Pvt Ltd (CMPL) as income from House Property is not correct as these receipt has either been applied for revenue expenditure or capital expenditure on the object of the Trust for charitable purposes. Even no defects had been pointed out by learned AO in books of account of assessee Trust and it had been granted exemption in earlier years.