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b) To help the poor patients with blood, natural and artificial limbs, medicine, food, nutrition, resettlement and other aids.

c)To help poor, needy or helpless families, individuals and persons and those displaced and victims of natural calamities.

d)To donate, subscribe, contribute, aid and help persons, associations, institutions and bodies engaged in charitable activities or objects similar to the objects of the Trust."

During the year under consideration the assessee trust spent a sum of Rs.5,62,917. 77 Paise towards the construction of a building and the question was whether this account could be said to have been spent by the assessee for charitable purposes within the meaning of Section 11 (1) (a) of the Act. The Income Tax Officer held that the said amount was not spent for charitable purposes. This finding has been upheld by the learned CIT (A).

It cannot be doubted that the acquisition of a suitable building was necessary for the assessee-trust to be able to carry out its objects of providing medical relief etc. and it is nobody's case that the building so constructed by the assessee is not in its actual use and occupation. Thus, the expenditure in question was incurred by the assessee in acquiring a building for carrying out its purposes and such an expenditure would necessarily be an expenditure incurred for the carrying out of the objects of the assessee trust. It is settled law that even capital expenditure incurred by an assessee in acquiring assets which are necessary for carrying out its objects amounts to application of income of the trust for charitable objects. In Satya Vijay Patel Hindu Dharam Shala Trust Vs. CIT, 86 I.T.R. 683 (Guj.) it was held that expenditure incurred in acquiring a capital asset for carrying out the dominant purpose of the trust was an expenditure within the meaning of sec. 11(1)(a) of the Income-tax Act, 1961.

1- In the case of Abdul Sathar Haji Moosa Sait Dharmastapanam v. Commissioner of Agricultural Income-Tax, Kerala, reported in 91 ITR-5 (SC).

2-In the case of Sri Agasthyar Trust commissioner of Income-Tax, reported in 236 ITR-23 (SC).

3- In the case of Commissioner of Income-Tax v. P. Iyya Nadar Charitable Trust, reported in (2006) 284 ITR-404 (Mad).

4-In the case of Assistant Commissioner of Income-Tax v. Thanthi Trust, reported in 247 ITR-785 (SC).

Learned counsel for the assessee submitted that the object of the assessee trust is the relevant consideration for the claim of exemption under Section 11 of the Act and the object of other Society is wholly irrelevant. He submitted that the object of the assessee is to establish, run, maintain, promote, aid to hospitals and to donate, subscribe, contribute, aid and help persons, associations, associations, institutions and bodies engaged in charitable activities. For running a hospital or dispensary a building is a basic necessity and, therefore, a piece of land has been taken on lease from the Society known as Pt. Pyare Lal Sharma Memorial Trust Society. He submitted that the assessee's trust is registered as charitable trust under Section 12-A of the Act. After the construction of the building the assessee trust is running hospital for the benefit of general public. He submitted that the object of the PMT Society was also found charitable by the appellate authority in their assessment case and the said order is valid till date. He submitted that on these facts the amount received towards donation and spent for the construction of building required for running the hospital was the application of such money for charitable purposes. He submitted that the Tribunal having regard to the entire facts and circumstances has recorded a categorical finding that the income was spent in the construction of building in question for the purposes of running hospital was an expenditure incurred for the purposes of carrying out the charitable objects and was an application of the income for charitable purposes within the meaning of Section 11 (1) (a) of the Act. He submitted that if any amount is incurred to achieve the object which is in the charitable nature, the amount incurred will be considered to be an expenditure and application of amount for charitable purposes within the meaning of Section 11 (1) (a) of the Act. In support of the contention he relied upon the following decisions:

In the case of Commissioner of Income Tax v. Banaras Brass Merchant and Manufacturers Association (Supra), the object of the association to promote and protect the trade, commerce, industry of the mercantile community has been held as the object of the general public utility and its income has been held exempted under Section 11 of the Act.

In the case of S. RM. M. CT. M. Tiruppani Trust v. Commissioner of Income-Tax (Supra), the assessee was a charitable trust. Its objects were to carry out Thiruppani or repairs to old Hindu temples, building new ones, giving aid to or establishing hostels, educational and industrial institutions, etc. A trust has utilized a sum of Rs.8 lakhs in purchasing building to be utilized as a hospital. Such investment has been treated to have been made for charitable purposes.