1The Judgment of the court was delivered by John Mathew, J.-
Whether the assessee's hospital is existing solely for philanthropic purposes and not for purposes of profit is the important question of law involved in this reference. The assessee (Pulikkal Medical Foundation) is a private company as defined under the Companies Act. 1956. The liability of its members is limited. It was incorporated on 23rd June 1976. It is running a hospital at Cochin known as 'Medical Trust Hospital'. The company became a deemed public company under S.43A(1A) with effect from 1st January 1986. The word 'private' in. the name of the company was cancelled from that date. Fresh certificate of incorporation consequent on change of name was given on 12th May 1988. Medical Trust Hospital was originally run by a firm of partners. That firm was dissolved on 15th October 1976 and its business was taken over by the assessee company, giving the partners of the firm due credit.

2 For the assessment year 1981-82 the assessee had a net profit of Rs. 6,02,123. After making adjustments the net income for income tax .purposes was shown by the assessee as Rs. 3,81,811. For the assessment year 1982-83 the profit of the a