Tamil nadu Cricket Association, CHENNAI V. DDIT, CHENNAI

ITA 1535/CHNY/2014

• Counselvise Citation: 153521714 RSA 2014
• Duration Of Justice: 1 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 22-06-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 03-06-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N RENGARAJ
• Keywords: Capital asset; Business income; Depreciation; Charitable institution; Scheme of amalgamation; Cancellation of registration; Revised return; Capital expenditure
• Section: 12AA; 32; 63; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NOS.1535, 1536 & 1537/MDS/2014 ' (' / ASSESSMENT YEARS : 2008-09 TO 2010-11 M/S TAMIL NADU CRICKET ASSOCIATION, NO.5, M.A.CHIDAMBARAM STADIUM, VICTORIA HOSTEL ROAD, CHEPAUK, CHENNAI - 600 005. PAN : AAAAT 0398 M V. THE DEPUTY DIRECTOR OF INCOME TAX (EXEMPTIONS), CHENNAI - 600 034. (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANT BY : SHRI V. RAVICHANDRAN, CA SHRI P.B. SRINIVASAN, CA ,-*+ . / / RESPONDENT BY : SHRI N. RENGARAJ, CIT 0 . 1$ / DATE OF HEARING : 22.06.2015 2!( . 1$ / DATE OF PRONOUNCEMENT : 14.08.2015 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: ALL THE THREE APPEALS OF THE ASSESSEE ARE DIRECT ED AGAINST THE COMMON ORDER PASSED BY THE COMMISSIONER OF INCO ME TAX (APPEALS)-VII, CHENNAI, DATED 28.03.2014 AND PERTAI N TO ASSESSMENT YEARS 2008-09, 2009-10 & 2010-11. SINCE COMMON 2 I.T.A. NOS.1535 TO 1537/MDS/14 ISSUE ARISES FOR CONSIDERATION IN ALL THE THREE APP EALS, WE HEARD THE APPEALS TOGETHER AND DISPOSING OF BY THIS COMMON OR DER. 2. SHRI V. RAVICHANDRAN, THE LD. REPRESENTATIVE FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSEE, A REGISTERED SOCIETY UNDER THE TAMIL NADU SOCIETIES REGISTRATION ACT, WAS REGI STERED UNDER SECTION 12AA OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') AS A CHARITABLE INSTITUTION. ACCORDING TO THE LD. REPRE SENTATIVE, THE MAIN OBJECT OF THE ASSESSEE-SOCIETY IS TO PROMOTE THE SP ORT OF CRICKET IN THE STATE OF TAMIL NADU AND IN THE UNION TERRITORY OF PUDUCHERRY. THE LD. REPRESENTATIVE SUBMITTED THAT THE ASSESSEE- SOCIETY CONDUCTS CRICKET TOURNAMENTS INCLUDING INTER-UNIVER SITY, INTER-SCHOOL, INTER-ASSOCIATION AND INTER-DISTRICT TOURNAMENTS. APART FROM THAT, THE LD. REPRESENTATIVE CLARIFIED THAT THE ASSESSEE-SOCI ETY IS ALSO PROVIDING COACHING FOR THE BENEFIT OF CRICKETERS. ACCORDING TO THE LD. REPRESENTATIVE, THE MEMBERS OF THE ASSESSEE-SOCIETY ARE THE DISTRICT ASSOCIATIONS AND THE CRICKET CLUBS IN THE CITY OF C HENNAI. 3. THE LD. REPRESENTATIVE FOR THE ASSESSEE FURTHER SUBMITTED THAT THE ASSESSEE-SOCIETY IS A MEMBER OF THE NATION AL BODY, BOARD OF CONTROL FOR CRICKET IN INDIA (BCCI), WHICH REGUL ATES AND PROMOTES THE SPORT OF CRICKET IN INDIA. IN TURN, BCCI IS TH E MEMBER OF THE INTERNATIONAL CRICKET COUNCIL (ICC). ACCORDING TO THE LD. 3 I.T.A. NOS.1535 TO 1537/MDS/14 REPRESENTATIVE, OTHER CRICKET ASSOCIATIONS / SOCIET IES ARE ALSO MEMBERS OF BCCI. 4. THE LD. REPRESENTATIVE FOR THE ASSESSEE FURTHER SUBMITTED THAT BCCI HOLDS TEST MATCHES WITH VISITING FOREIGN TEAMS AND ONE- DAY INTERNATIONAL MATCHES. VARIOUS CRICKET ASSOCIA TIONS IN STATE WHICH PLAY MATCHES IN THEIR RESPECTIVE STADIUM. TH E INTER-STATE AND INTER-ZONE TOURNAMENTS SUCH AS RANJI TROPHY, DULEEP TROPHY, IRANI TROPHY, ETC. ARE ORGANIZED BY BCCI. HOWEVER, THE S AME WAS CONDUCTED BY THE STATE CRICKET ASSOCIATION LIKE ASS ESSEE. THE LD. REPRESENTATIVE FURTHER SUBMITTED THAT BCCI ALSO ORG ANIZES TWENTY OVER CRICKET MATCHES BETWEEN VARIOUS FRANCHISEES WH ICH IS OTHERWISE KNOWN AS INDIAN PREMIER LEAGUE. THE FRAN CHISEES CONDUCT THE MATCHES IN THE STADIA BELONGING TO THE STATE CRICKET ASSOCIATIONS / SOCIETIES. ACCORDING TO THE LD. REP RESENTATIVE, THE ASSESSEE, BEING A STATE CRICKET ASSOCIATION, IS ENT ITLED TO REVENUE ON SALE OF TICKETS WHEN IT CONDUCTS INTERNATIONAL M ATCHES. THE ASSESSEE WOULD ALSO BE ENTITLED TO ALL IN-STADIA SP ONSORSHIPS, ADVERTISEMENTS AND BEVERAGE REVENUE, ETC. THE LD. REPRESENTATIVE FURTHER SUBMITTED THAT THE ASSESSEE HAS TO INCUR AL L THE EXPENDITURES AT THE STADIUM FOR CONDUCTING THE MATCHES. BCCI EA RNS REVENUES BY WAY OF SPONSORSHIPS AND MEDIA RIGHTS FOR TELECAS T AND BROADCAST 4 I.T.A. NOS.1535 TO 1537/MDS/14 OF THE MATCHES AS WELL AS FRANCHISE REVENUES FROM T HE INDIAN PREMIER LEAGUE. ACCORDING TO THE LD. REPRESENTATIV E, BCCI DISTRIBUTES 70% OF REVENUES TO MEMBER CRICKET ASSOC IATIONS, INCLUDING THE ASSESSEE-SOCIETY. THE LD. REPRESENTA TIVE HAS CLARIFIED THAT THE ASSESSEE EARNS INCOME UNDER THE FOLLOWING HEADS:- (1) SUBSCRIPTION FROM MEMBERS (2) SALE OF TICKETS (3) REVENUE FROM ADVERTISEMENTS (4) RECEIPTS FROM BCCI (5) INTEREST FROM BANK DEPOSITS ACCORDING TO THE LD. REPRESENTATIVE, THE ASSESSEE-S OCIETY IN FACT USES ALL THESE INCOMES TO PROMOTE THE SPORT OF CRIC KET IN THE STATE OF TAMIL NADU AND IN THE UNION TERRITORY OF PURUDCHERR Y. THE ASSESSEE-SOCIETY, ACCORDING TO THE LD. REPRESENTATI VE, HAS CONSTRUCTED A MODERN CRICKET STADIUM AT CHENNAI WIT H STATE OF ART FACILITIES FOR CONDUCTING INTERNATIONAL CRICKET MAT CHES. OVER THE DECADES OF TIME, THE SPORT OF CRICKET BECAME POPULA R IN THE STATE OF TAMIL NADU AND SEVERAL PLAYERS FROM TAMIL NADU HAVE GONE ON TO WIN INTERNATIONAL AND NATIONAL ACCLAIM. 5. THE LD. REPRESENTATIVE FOR THE ASSESSEE SUBMITTE D THAT IN FACT REGISTRATION TO THE ASSESSEE-SOCIETY UNDER SEC TION 12AA WAS GRANTED BY DIRECTOR OF INCOME TAX (EXEMPTIONS) ON 2 8.03.2003 AND THE ASSESSEE HAD AVAILED EXEMPTION UNDER SECTION 11 TO 13 OF THE 5 I.T.A. NOS.1535 TO 1537/MDS/14 ACT UPTO ASSESSMENT YEAR 2008-09. FOR THE ASSESSME NT YEARS 2009-10 AND 2010-11, THE ASSESSEE CLAIMED EXEMPTION UNDER SECTION 11 OF THE ACT IN RESPECT OF ITS ENTIRE INCO ME. HOWEVER, THE ASSESSING OFFICER FOUND THAT PROMOTING CRICKET MAY BE CHARITY PROVIDED IT DOES NOT INVOLVE ANY ACTIVITY WHICH IS IN THE NATURE OF COMMERCIAL. REFERRING TO SUBSCRIPTION FEE RECEIVED FROM THE MEMBERS OF THE ASSESSEE-SOCIETY, THE LD. REPRESENTA TIVE SUBMITTED THAT THE ASSESSING OFFICER CAME TO A CONCLUSION THA T SUBSCRIPTIONS ARE IN THE NATURE OF COMMERCIAL RECEIPT FOR PROVIDI NG SERVICE TO THE MEMBERS OF THE ASSESSEE-SOCIETY. THE ASSESSING OFF ICER HAS ALSO FOUND THAT THE ASSESSEE EARNS SURPLUS PROFIT ON CON DUCTING TEST MATCHES BETWEEN INDIA AND ENGLAND. REFERRING TO SE CTION 2(15) OF THE ACT, THE LD. REPRESENTATIVE SUBMITTED THAT WITH EFFECT FROM 01.04.1984, CHARITABLE PURPOSE INCLUDES RELIEF OF POOR, EDUCATION, MEDICAL RELIEF AND ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. REFERRING TO THE CIRCULAR ISSUED B Y THE CBDT IN CIRCULAR NO.395 DATED 24.09.1984, THE LD. REPRESENT ATIVE SUBMITTED THAT PROMOTING SPORT WAS CONSIDERED TO BE A CHARITA BLE PURPOSE BY THE CBDT. ACCORDING TO THE LD. REPRESENTATIVE, ADV ANCEMENT OF ANY OBJECT BENEFICIAL TO GENERAL PUBLIC OR A SECTIO N OF PUBLIC AS DISTINGUISHED FROM AN INDIVIDUAL OR GROUP OF INDIVI DUALS WOULD BE AN OBJECT OF GENERAL PUBLIC UTILITY. ACCORDINGLY, THE CBDT FOUND THAT 6 I.T.A. NOS.1535 TO 1537/MDS/14 PROMOTION OF SPORTS AND GAMES WOULD AMOUNT TO ADVAN CEMENT OF AN OBJECT BENEFICIAL TO PUBLIC. THEREFORE, THE ASSESS EE-SOCIETY HAS TO BE TREATED AS CHARITABLE INSTITUTION. IN FACT, ACC ORDING TO THE LD. REPRESENTATIVE, THE REGISTRATION GRANTED TO THE ASS ESSEE-SOCIETY UNDER SECTION 12AA OF THE ACT WAS CANCELLED BY THE DIRECTOR OF INCOME TAX (EXEMPTIONS) BY AN ORDER DATED 29.12.201 1, A COPY OF WHICH IS AVAILABLE AT PAGE 197 OF THE PAPER-BOOK. THE ASSESSEE CHALLENGED THE CORRECTNESS OF THE ORDER OF THE DIRE CTOR OF INCOME TAX (EXEMPTIONS) CANCELLING THE REGISTRATION GRANTE D UNDER SECTION 12AA OF THE ACT, IN I.T.A. NO.396/MDS/2012. THIS T RIBUNAL BY AN ORDER DATED 22.02.2013, CONFIRMED THE ORDER OF THE DIRECTOR OF INCOME TAX (EXEMPTIONS). THE ASSESSEE CARRIED THE MATTER BEFORE THE HIGH COURT IN TAX CASE (APPEAL) NO.450 OF 2013. A DIVISION BENCH OF THE HIGH COURT, BY JUDGMENT DATED 21.10.20 13, FOUND THAT CANCELLATION OF REGISTRATION IS NOT JUSTIFIED, ACCO RDINGLY, SET ASIDE THE ORDER OF THE TRIBUNAL. THE HIGH COURT FURTHER FOUN D THAT THE REVENUE HAS NOT MADE OUT ANY GROUND TO CANCEL THE R EGISTRATION GRANTED UNDER SECTION 12AA OF THE ACT. THEREFORE, ACCORDING TO THE LD. REPRESENTATIVE, AS ON TODAY, THE REGISTRATION G RANTED UNDER SECTION 12AA OF THE ACT STANDS RESTORED. THEREFORE , THE ASSESSEE IS ENTITLED FOR EXEMPTION UNDER SECTION 11 OF THE A CT. REFERRING TO THE ORDER OF THE ASSESSMENT FOR ASSESSMENT YEAR 200 8-09, LD. 7 I.T.A. NOS.1535 TO 1537/MDS/14 REPRESENTATIVE POINTED OUT THAT THE ASSESSEE CLAIME D DEPRECIATION IN RESPECT OF THE CAPITAL ASSET TO THE EXTENT OF ` 1,61,75,931/-. HOWEVER, IN THE REVISED RETURN, THE ASSESSEE CLAIME D DEPRECIATION TO THE EXTENT OF ` 1,61,75,931/- AND THE CAPITAL EXPENDITURE TO THE EXTENT OF ` 1,32,74,928/- AS APPLICATION OF INCOME. THE ASSESS ING OFFICER FOUND THAT THE INCOME WAS RE-COMPUTED AFTER TAKING INTO ACCOUNT THE RECEIPTS AND PAYMENTS OF SOUTH AFRICA T EST MATCH AND AFRO ASIA CUP MATCH SEPARATELY. HOWEVER, THE ASSES SING OFFICER REJECTED THE CLAIM OF THE ASSESSEE FOR DEPRECIATION BY PLACING RELIANCE ON THE JUDGMENT OF APEX COURT IN ESCORTS V . UNION OF INDIA (199 ITR 43). AFTER CONDONING THE DELAY IN FILING FORM 10 OF ACCUMULATION OF INCOME, EXEMPTION WAS ALLOWED UNDER SECTION 11(2) OF THE ACT. REFERRING TO THE ORDER OF THE TR IBUNAL IN THE ASSESSEE'S OWN CASE FOR ASSESSMENT YEAR 2007-08 IN I.T.A. NO.1851/MDS/201(1) DATED 10.04.2012, THE LD. REPRES ENTATIVE SUBMITTED THAT IN THE ASSESSEE'S OWN CASE FOR ASSES SMENT YEAR 2007-08, THIS TRIBUNAL GRANTED DEPRECIATION AFTER F OLLOWING ITS EARLIER ORDER IN SRI MARIAMMAN EDUCATIONAL HEALTH AND CHARI TABLE TRUST V. ACIT IN I.T.A. NOS.142 TO 144/MDS/2010 DATED 02.02. 2011. THEREFORE, ACCORDING TO THE LD. REPRESENTATIVE, THE ASSESSING 8 I.T.A. NOS.1535 TO 1537/MDS/14 OFFICER IS NOT JUSTIFIED IN REJECTING THE CLAIM OF DEPRECIATION FOR ASSESSMENT YEAR 2008-09. 6. COMING TO THE ASSESSMENT YEARS 2009-10 AND 2010- 11, THE LD. REPRESENTATIVE SUBMITTED THAT THE ASSESSING OFF ICER FOUND THAT THE ACTIVITY OF THE ASSESSEE-SOCIETY FALLS WITHIN T HE PURVIEW OF BUSINESS. REFERRING TO INDIAN PREMIER LEAGUE, THE LD. REPRESENTATIVE SUBMITTED THAT THE ASSESSING OFFICER ESTIMATED THE TELEVISION AUDIENCE MORE THAN 200 MILLIONS IN INDIA AND INDIAN PREMIER LEAGUE MATCH HAS A GLOBAL REACH IN RESPECT OF THE ADVERTISEMENT PERTAINING TO NEW PRODUCTION LAUNCH. THEREFORE, THE ASSESSING OFFICER FOUND THAT IT IS A COMMERCIAL VEN TURE. ACCORDING TO THE LD. REPRESENTATIVE, THE ASSESSING OFFICER PL ACED HIS RELIANCE ON THE ORDER OF THIS TRIBUNAL CONFIRMING THE CANCEL LATION OF REGISTRATION UNDER SECTION 12AA OF THE ACT. THE AS SESSING OFFICER HAD NO BENEFIT OF GOING THROUGH THE JUDGMENT OF THE HIGH COURT WHICH REVERSES THE ORDER OF THE TRIBUNAL. ACCORDIN G TO THE LD. REPRESENTATIVE, CRICKET IS ADMITTEDLY ONE OF THE RE COGNIZED SPORTS IN INDIA. THEREFORE, THE ASSESSEE IS ELIGIBLE FOR EXE MPTION UNDER SECTION 11 OF THE ACT. 7. THE LD. REPRESENTATIVE FURTHER SUBMITTED THAT IT IS NOBODYS CASE THAT THE FUNDS WERE DIVERTED FOR ANY OTHER PUR POSE OTHER THAN 9 I.T.A. NOS.1535 TO 1537/MDS/14 PROMOTING THE SPORTS. NO INDIVIDUAL IS BENEFITING OUT OF THE FUNDS OF THE ASSESSEE-SOCIETY. THE ENTIRE FUNDS GENERATED I N THE COURSE OF ITS SPORT ACTIVITY IS RE-INVESTED IN TRAINING THE S TUDENTS AND OTHER PLAYERS. THEREFORE, ACCORDING TO THE LD. REPRESENT ATIVE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN DISALLOWING T HE CLAIM OF THE ASSESSEE UNDER SECTION 11 OF THE ACT. SIMILARLY, F OR ASSESSMENT YEAR 2010-11, THE CIT(APPEALS) DISALLOWED THE CLAIM OF THE ASSESSEE. ACCORDING TO THE LD. REPRESENTATIVE, THE ASSESSING OFFICER IS INFLUENCED BY THE INDIAN PREMIER LEAGUE MATCHES. ACCORDING TO THE LD. REPRESENTATIVE, INDIAN PREMIER LEAGUE IS CONDUCTED BY BCCI AND THE ASSESSEE HAS NOTHING TO D O WITH INDIAN PREMIER LEAGUE MATCHES. THE ASSESSEE, BEING ONE OF THE MEMBERS OF BCCI, IS PROVIDING THE STADIUM AND MAKIN G ALL ARRANGEMENTS FOR CONDUCTING INDIAN PREMIER LEAGUE B Y BCCI. THE ENTIRE REVENUE EARNED OUT OF INDIAN PREMIER LEAGUE GOES TO BCCI AND THE ASSESSEE IS ALLOTTED CERTAIN SHARES FOR MEE TING THE EXPENDITURE. THE SURPLUS, IF ANY, REMAINS IS RE-IN VESTED FOR CONDUCTING THE MATCHES IN THE STATE OF TAMIL NADU A ND IN THE UNION TERRITORY OF PUDUCHERRY. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN DISALLOWING THE CLAIM OF THE ASSESSEE. 10 I.T.A. NOS.1535 TO 1537/MDS/14 8. ON THE CONTRARY, SHRI N. RENGARAJAN, THE LD. DEP ARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE-SOCIETY IS CONDUCTING CRICKET MATCHES LIKE A TRADE/BUSINESS. ACCORDING TO THE LD. D.R., SHARING THE REVENUE FROM BCCI IN ADVERTISEMENT IS D EFINITELY A COMMERCIAL RECEIPT. DURING THE ASSESSMENT YEAR 2010 -11, THE ASSESSEE RECEIVED ` 22,29,49,392/- FROM BCCI. THE ASSESSEE HAS ALSO RECEIVED INDIAN PREMIER LEAGUE SUBSIDY TO THE EXTENT ` 8.02 CRORES WHICH AMOUNTS TO 25% OF ITS GROSS RECEIPTS. ACCORDING TO THE LD. D.R., INDIAN PREMIER LEAGUE MATCHES ARE HIGH VA LUE COMMERCIAL VENTURES, THE PLAYERS ARE SOLD ON AUCTIO N PUBLICLY, THE INDIVIDUAL PLAYERS ARE SOLD IN A HEAVY PRICE TAG. A CCORDING TO THE LD. D.R., INDIAN PREMIER LEAGUE MATCHES ARE IN THE NATU RE OF ENTERTAINMENT INDUSTRY. THEREFORE, THE CHARACTERIST IC OF THE ACTIVITY OF THE ASSESSEE-SOCIETY IS TOTALLY CHANGED INTO A COMM ERCIAL VENTURE. 9. ACCORDING TO THE LD. D.R., THE ASSESSEE HAS RECE IVED ` 14,27,16,192/- IN THE ASSESSMENT YEAR 2010-11 FROM TV SUBSIDY. TV SUBSIDY ADMITTEDLY IS A SHARE RECEIVED FROM BCCI ON ACCOUNT OF AUDIT REVENUES ARISING FROM TELECAST OF TEST MATCHE S. THE LD. D.R. FURTHER SUBMITTED THAT ASSESSEE-SOCIETY WAS EXPECTE D TO HOST TEST MATCHES, ONE-DAY MATCHES, T-20 MATCHES AND INDIAN P REMIER LEAGUE MATCHES. ACCORDING TO THE LD. D.R., THE SHA RE RECEIVED BY 11 I.T.A. NOS.1535 TO 1537/MDS/14 THE ASSESSEE FROM BCCI IN THE FORM OF SUBSIDY / GRA NT IS NOTHING BUT A SHARE OF PROFIT COLLECTED FROM BCCI FROM ADVERTIS EMENTS. BCCI IN FACT EARNS HUGE MONEY ON ACCOUNT OF PHENOMENAL ADVE RTISEMENT. THOUGH THE ASSESSEE CLAIMS IT TO BE A TV SUBSIDY, I T IS OBVIOUSLY A MISNOMER. ACCORDING TO THE LD. D.R., THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 11 OF THE ACT IN VIEW O F PROVISO TO SECTION 2(15) OF THE ACT. 10. REFERRING TO THE ORDER OF THE ASSESSING OFFICER FOR THE ASSESSMENT YEAR 2008-09, THE LD. D.R. SUBMITTED THA T IN FACT THE ASSESSING OFFICER ALLOWED EXEMPTION UNDER SECTION 1 1 OF THE ACT. WHAT WAS DISALLOWED WAS ONLY DEPRECIATION CLAIMED B Y THE ASSESSEE. ACCORDING TO THE LD. D.R., THE ASSESSEE IN ONE HAND IS CLAIMING AS APPLICATION OF INCOME WHILE PURCHASING THE ASSET AND ON THE VERY ASSET, THE ASSESSEE IS CLAIMING DEPRECIATI ON. ACCORDING TO THE LD. D.R., ONCE THE COST OF THE CAPITAL ASSET WA S ALLOWED AS APPLICATION OF INCOME UNDER SECTION 11 OF THE ACT, THE COST OF THE SAID ASSET BECOMES NIL. THEREFORE, THERE IS NO QUE STION OF ALLOWING ANY DEPRECIATION. ACCORDING TO THE LD. D.R., THIS ASPECT WAS NOT CONSIDERED BY THE EARLIER BENCH OF THIS TRIBUNAL. 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. LETS FIR ST TAKE ASSESSMENT 12 I.T.A. NOS.1535 TO 1537/MDS/14 YEAR 2008-09. THE ASSESSEE IS CLAIMING DEPRECIATIO N UNDER SECTION 32 OF THE ACT. FOR THE PURPOSE OF CONVENIENCE, WE ARE REPRODUCING SECTION 32 HEREUNDER:- 32 (1) IN RESPECT OF DEPRECIATION OF-- (I) BUILDINGS, MACHINERY, PLANT OR FURNITURE BEING TANGIBLE ASSETS ; (II) KNOW-HOW, PATENTS, COPYRIGHTS, TRADE MARKS, LI CENCES, FRANCHISES OR ANY OTHER BUSINESS OR COMMERCIAL RIGHTS OF SIMIL AR NATURE, BEING INTANGIBLE ASSETS ACQUIRED ON OR AFTER THE 1ST DAY OF APRIL, 1998, OWNED, WHOLLY OR PARTLY, BY THE ASSESSEE AND USED F OR THE PURPOSES OF THE BUSINESS OR PROFESSION THE FOLLOWING DEDUCTI ONS SHALL BE ALLOWED-- (I) IN THE CASE OF ASSETS OF AN UNDERTAKING ENGAGED IN GENERATION OR GENERATION AND DISTRIBUTION OF POWER, SUCH PERCENTA GE ON THE ACTUAL COST THEREOF TO THE ASSESSEE AS MAY BE PRESCRIBED. (II) IN THE CASE OF ANY BLOCK OF ASSETS, SUCH PERCE NTAGE ON THE WRITTEN DOWN VALUE THEREOF AS MAY BE PRESCRIBED: PROVIDED THAT NO DEDUCTION SHALL BE ALLOWED UNDER T HIS CLAUSE IN RESPECT OF--(A) ANY MOTOR CAR MANUFACTURED OUTSIDE INDIA, WHERE SUCH MOTOR CAR IS ACQIRED BY THE ASSESSEE AFTER THE 28TH DAY OF FEBRUARY, 1975 5BUT BEFORE THE 1ST DAY OF APRIL, 20 01, UNLESS IT IS USED--(I) IN A BUSINESS OF RUNNING IT ON HIRE FOR T OURISTS; OR(II) OUTSIDE INDIA IN HIS BUSINESS OR PROFESSION IN ANOT HER COUNTRY ; AND(B) ANY MACHINERY OR PLANT IF THE ACTUAL COST TH EREOF IS ALLOWED AS A DEDUCTION IN ONE OR MORE YEARS UNDER AN AGREEM ENT ENTERED INTO BY THE CENTRAL GOVERNMENT UNDER SECTION 42: PROVIDED FURTHER THAT WHERE ANY ASSET REFERRED TO I N CLAUSE (I) 6OR CLAUSE (II) OR CLAUSE (IIA), AS THE CASE MAY BE, IS ACQUIRED BY THE ASSESSEE DURING THE PREVIOUS YEAR AND IS PUT TO USE FOR THE PURPOSES OF BUSINESS OR PROFESSION FOR A PERIOD OF LESS THAN ONE HUNDRED AND EIGHTY DAYS IN THAT PREVIOUS YEAR, THE DEDUCTION UN DER THIS SUB- SECTION IN RESPECT OF SUCH ASSET SHALL BE RESTRICTE D TO FIFTY PER CENT. OF THE AMOUNT CALCULATED AT THE PERCENTAGE PRESCRIB ED FOR AN ASSET UNDER CLAUSE (I) 6OR CLAUSE (II) OR CLAUSE (IIA), A S THE CASE MAY BE: PROVIDED ALSO THAT WHERE AN ASSET BEING COMMERCIAL VEHICLE IS ACQUIRED BY THE ASSESSEE ON OR AFTER THE 1ST DAY OF OCTOBER, 1998, BUT BEFORE THE 1ST DAY OF APRIL, 1999, AND IS PUT T O USE BEFORE THE 1ST DAY OF APRIL, 1999, FOR THE PURPOSES OF BUSINES S OR PROFESSION, THE DEDUCTION IN RESPECT OF SUCH ASSET SHALL BE ALL OWED ON SUCH PERCENTAGE ON THE WRITTEN DOWN VALUE THEREOF AS MAY BE PRESCRIBED. EXPLANATION FOR THE PURPOSES OF THIS PROVISO,-- (A) THE EXPRESSION 'COMMERCIAL VEHICLE' MEANS 'HEAV Y GOODS VEHICLE', 'HEAVY PASSENGER MOTOR VEHICLE', 'LIGHT M OTOR VEHICLE', 13 I.T.A. NOS.1535 TO 1537/MDS/14 'MEDIUM GOODS VEHICLE' AND 'MEDIUM PASSENGER MOTOR VEHICLE' BUT DOES NOT INCLUDE 'MAXI CAB', 'MOTOR-CAB', 'TRACTOR' AND 'ROAD-ROLLER' ; (B) THE EXPRESSIONS 'HEAVY GOODS VEHICLE', 'HEAVY P ASSENGER MOTOR VEHICLE', 'LIGHT MOTOR VEHICLE', 'MEDIUM GOODS VEHI CLE', 'MEDIUM PASSENGER MOTOR VEHICLE', 'MAXI-CAB', 'MOTOR-CAB', 'TRACTOR' AND 'ROAD-ROLLER' SHALL HAVE THE MEANINGS RESPECTIVELY AS ASSIGNED TO THEM IN SECTION 2 OF THE MOTOR VEHICLES ACT, 1988 ( 59 OF 1988). PROVIDED ALSO THAT, IN RESPECT OF THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR COMMENCING ON THE 1ST DAY OF APRIL, 1991, THE DEDUCTION IN RELATION TO ANY BLOCK OF ASSETS UNDER THIS CLAUSE SHALL, IN THE CASE OF A COMPANY, BE RESTRICTED TO SEVENTY- FIVE PER CENT. OF THE AMOUNT CALCULATED AT THE PERCENTAGE, ON THE WRI TTEN DOWN VALUE OF SUCH ASSETS, PRESCRIBED UNDER THIS ACT IMMEDIATE LY BEFORE THE COMMENCEMENT OF THE TAXATION LAWS (AMENDMENT) ACT, 1991. PROVIDED ALSO THAT THE AGGREGATE DEDUCTION, IN RESP ECT OF DEPRECIATION OF BUILDINGS, MACHINERY, PLANT OR FURN ITURE, BEING TANGIBLE ASSETS OR KNOW-HOW, PATENTS, COPYRIGHTS, T RADEMARKS, LICENCES, FRANCHISES OR ANY OTHER BUSINESS OR COMME RCIAL RIGHTS OF SIMILAR NATURE, BEING INTANGIBLE ASSETS ALLOWABLE T O THE PREDECESSOR AND THE SUCCESSOR IN THE CASE OF SUCCESSION REFERRE D TO IN CLAUSE (XIII), CLAUSE (XIIIB) AND CLAUSE (XIV) OF SECTION 47 OR SECTION 170 OR TO THE AMALGAMATING COMPANY AND THE AMALGAMATED COM PANY IN THE CASE OF AMALGAMATION, OR TO THE DEMERGED COMPAN Y AND THE RESULTING COMPANY IN THE CASE OF DEMERGER, AS THE C ASE MAY BE, SHALL NOT EXCEED IN ANY PREVIOUS YEAR THE DEDUCTION CALCULATED AT THE PRESCRIBED RATES AS IF THE SUCCESSION OR THE AMALGA MATION OR THE DEMERGER, AS THE CASE MAY BE, HAD NOT TAKEN PLACE, AND SUCH DEDUCTION SHALL BE APPORTIONED BETWEEN THE PREDECES SOR AND THE SUCCESSOR, OR THE AMALGAMATING COMPANY AND THE AMAL GAMATED COMPANY, OR THE DEMERGED COMPANY AND THE RESULTING COMPANY, AS THE CASE MAY BE, IN THE RATIO OF THE NUMBER OF DAYS FOR WHICH THE ASSETS WERE USED BY THEM. EXPLANATION 1. WHERE THE BUSINESS OR PROFESSION OF THE ASSESSEE IS CARRIED ON IN A BUILDING NOT OWNED BY HIM BUT IN RESPECT OF WHICH THE ASSESSEE HOLDS A LEASE OR OTHER RIGHT OF OCCUPA NCY AND ANY CAPITAL EXPENDITURE IS INCURRED BY THE ASSESSEE FOR THE PURPOSES OF THE BUSINESS OR PROFESSION ON THE CONSTRUCTION OF A NY STRUCTURE OR DOING OF ANY WORK, IN OR IN RELATION TO, AND BY WAY OF RENOVATION OR EXTENSION OF, OR IMPROVEMENT TO, THE BUILDING, THEN , THE PROVISIONS OF THIS CLAUSE SHALL APPLY AS IF THE SAID STRUCTURE OR WORK IS A BUILDING OWNED BY THE ASSESSEE. EXPLANATION 2. FOR THE PURPOSES OF THIS SUB-SECTION 'WRITTEN DO WN VALUE OF THE BLOCK OF ASSETS' SHALL HAVE THE SAME M EANING AS IN CLAUSE (C) OF SUB-SECTION (6) OF SECTION 43; EXPLANATION 3. FOR THE PURPOSES OF THIS SUB-SECTION, 10THE EXPRESSIONS 'ASSETS' SHALL MEAN-- (A) TANGIBLE ASSETS, BEING BUILDINGS, MACHINERY, PL ANT OR FURNITURE ; (B) INTANGIBLE ASSETS, BEING KNOW-HOW, PATENTS, COP YRIGHTS, TRADE MARKS, LICENCES, FRANCHISES OR ANY OTHER BUSINESS O R COMMERCIAL RIGHTS OF SIMILAR NATURE. 14 I.T.A. NOS.1535 TO 1537/MDS/14 EXPLANATION 4. FOR THE PURPOSES OF THIS SUB-SECTION, THE EXPRESSION 'KNOW-HOW' MEANS ANY INDUSTRIAL INFORMAT ION OR TECHNIQUE LIKELY TO ASSIST IN THE MANUFACTURE OR PR OCESSING OF GOODS OR IN THE WORKING OF A MINE, OIL-WELL OR OTHER SOUR CES OF MINERAL DEPOSITS (INCLUDING SEARCHING FOR DISCOVERY OR TEST ING OF DEPOSITS FOR THE WINNING OF ACCESS THERETO) ; EXPLANATION 5. FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED THAT THE PROVISIONS OF THIS SUB-SECTION SHALL APPLY WHETHER OR NOT THE ASSESSEE HAS CLAIMED THE DEDUCTION IN RESPECT OF DE PRECIATION IN COMPUTING HIS TOTAL INCOME ; (IIA) IN THE CASE OF ANY NEW MACHINERY OR PLANT (OT HER THAN SHIPS AND AIRCRAFT), WHICH HAS BEEN ACQUIRED AND INSTALLE D AFTER THE 31ST DAY OF MARCH, 2005, BY AN ASSESSEE ENGAGED IN THE B USINESS OF MANUFACTURE OR PRODUCTION OF ANY ARTICLE OR THING, A FURTHER SUM EQUAL TO TWENTY PER CENT. OF THE ACTUAL COST OF SUC H MACHINERY OR PLANT SHALL BE ALLOWED AS DEDUCTION UNDER CLAUSE (I I) : PROVIDED THAT NO DEDUCTION SHALL BE ALLOWED IN RESP ECT OF-(A) ANY MACHINERY OR PLANT WHICH, BEFORE ITS INSTALLATION B Y THE ASSESSEE, WAS USED EITHER WITHIN OR OUTSIDE INDIA BY ANY OTHE R PERSON ; OR(B) ANY MACHINERY OR PLANT INSTALLED IN ANY OFFICE PREM ISES OR ANY RESIDENTIAL ACCOMMODATION, INCLUDING ACCOMMODATION IN THE NATURE OF A GUEST-HOUSE ; OR(C) ANY OFFICE APPLIANCES OR R OAD TRANSPORT VEHICLES ; OR(D) ANY MACHINERY OR PLANT, THE WHOLE OF THE ACTUAL COST OF WHICH IS ALLOWED AS A DEDUCTION (WHETHER BY WAY OF DEPRECIATION OR OTHERWISE) IN COMPUTING THE INCOME CHARGEABLE UN DER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION' OF AN Y ONE PREVIOUS YEAR ; (III) IN THE CASE OF ANY BUILDING, MACHINERY, PLANT OR FURNITURE IN RESPECT OF WHICH DEPRECIATION IS CLAIMED AND ALLOWE D UNDER CLAUSE (I) AND WHICH IS SOLD, DISCARDED, DEMOLISHED OR DES TROYED IN THE PREVIOUS YEAR (OTHER THAN THE PREVIOUS YEAR IN WHIC H IT IS FIRST BROUGHT INTO USE), THE AMOUNT BY WHICH THE MONEYS P AYABLE IN RESPECT OF SUCH BUILDING, MACHINERY, PLANT OR FURNI TURE, TOGETHER WITH THE AMOUNT OF SCRAP VALUE, IF ANY, FALL SHORT OF TH E WRITTEN DOWN VALUE THEREOF : PROVIDED THAT SUCH DEFICIENCY IS ACTUALLY WRITTEN O FF IN THE BOOKS OF THE ASSESSEE. EXPLANATION FOR THE PURPOSES OF THIS CLAUSE,-- (1) 'MONEYS PAYABLE' IN RESPECT OF ANY BUILDING, MA CHINERY, PLANT OR FURNITURE INCLUDES (A) ANY INSURANCE, SALVAGE OR COMPENSATION MONEYS P AYABLE IN RESPECT THEREOF ; (B) WHERE THE BUILDING, MACHINERY, PLANT OR FURNITU RE IS SOLD, THE PRICE FOR WHICH IT IS SOLD, SO, HOWEVER, THAT WHERE THE ACTUAL COST OF A MOTOR CAR IS, IN ACCORDANCE WITH THE PROVISO TO CLAUSE (1) OF SECTIO N 43, TAKEN TO BE TWENTY-FIVE THOUSAND RUPEES, THE MONEYS PAYABLE IN RESPECT OF SUCH MOTOR CAR SHALL BE TAKEN TO BE A SUM WHICH BEARS TO THE AMOUNT FOR WHICH THE MOTOR CAR IS SOLD OR, AS THE CASE MAY BE, THE AMOUNT OF ANY INSURANCE, SALVAGE OR COMPENSATION MONEYS PAYAB LE IN RESPECT 15 I.T.A. NOS.1535 TO 1537/MDS/14 THEREOF (INCLUDING THE AMOUNT OF SCRAP VALUE, IF AN Y) THE SAME PROPORTION AS THE AMOUNT OF TWENTY-FIVE THOUSAND RU PEES BEARS TO THE ACTUAL COST OF THE MOTOR CAR TO THE ASSESSEE AS IT WOULD HAVE BEEN COMPUTED BEFORE APPLYING THE SAID PROVISO ; (2) 'SOLD' INCLUDES A TRANSFER BY WAY OF EXCHANGE O R A COMPULSORY ACQUISITION UNDER ANY LAW FOR THE TIME BEING IN FOR CE BUT DOES NOT INCLUDE A TRANSFER, IN A SCHEME OF AMALGAMATION, OF ANY ASSET BY THE AMALGAMATING COMPANY TO THE AMALGAMATED COMPANY WHERE THE AMALGAMATED COMPANY IS 8AN INDIAN COMPANY OR IN A SCHEME OF AMALGAMATION OF A BANKING COMPANY, AS REFERRED TO I N CLAUSE (C) OF SECTION 5 OF THE BANKING REGULATION ACT, 1949 (10 O F 1949), WITH A BANKING INSTITUTION AS REFERRED TO IN SUB-SECTION ( 15) OF SECTION 45 OF THE SAID ACT, SANCTIONED AND BROUGHT INTO FORCE BY THE CENTRAL GOVERNMENT UNDER SUB-SECTION (7) OF SECTION 45 OF T HAT ACT, OF ANY ASSET BY THE BANKING COMPANY TO THE BANKING INSTITU TION. (2) WHERE, IN THE ASSESSMENT OF THE ASSESSEE, FULL EFFECT CANNOT BE GIVEN TO ANY ALLOWANCE UNDER SUB-SECTION (1) IN ANY PREVIOUS YEAR, OWING TO THERE BEING NO PROFITS OR GAINS CHARGEABLE FOR THAT PREVIOUS YEAR, OR OWING TO THE PROFITS OR GAINS CHARGEABLE B EING LESS THAN THE ALLOWANCE, THEN, SUBJECT TO THE PROVISIONS OF SUB-S ECTION (2) OF SECTION 72 AND SUB-SECTION (3) OF SECTION 73, THE A LLOWANCE OR THE PART OF THE ALLOWANCE TO WHICH EFFECT HAS NOT BEEN GIVEN, AS THE CASE MAY BE, SHALL BE ADDED TO THE AMOUNT OF THE ALLOWAN CE FOR DEPRECIATION FOR THE FOLLOWING PREVIOUS YEAR AND DE EMED TO BE PART OF THAT ALLOWANCE, OR IF THERE IS NO SUCH ALLOWANCE FOR THAT PREVIOUS YEAR, BE DEEMED TO BE THE ALLOWANCE FOR THAT PREVIO US YEAR, AND SO ON FOR THE SUCCEEDING PREVIOUS YEARS. IN VIEW OF SECTION 32 OF THE ACT, DEPRECIATION HAS TO BE ALLOWED ONLY IN RESPECT OF AN ASSET OWNED BY THE ASSESSEE AND US ED FOR THE PURPOSE OF BUSINESS OR PROFESSION. IN THIS CASE, I T IS NOT A CASE OF THE ASSESSEE THAT THEY ARE NOT DOING ANY BUSINESS O R PROFESSION. THE ASSESSEE IS CATEGORICALLY MAKING A STATEMENT TH AT THEY ARE CHARITABLE ORGANIZATION ENGAGED ITSELF IN PUBLIC UT ILITY SERVICE. ONCE THE ASSESSEE CLAIMS THAT IT IS A CHARITABLE ORGANIZ ATION AND NOT ENGAGED IN BUSINESS OR PROFESSION, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE PROVISIONS OF SECTION 32 HAVE NO A PPLICATION AT ALL. THE PROVISIONS OF SECTION 32 IN FACT WERE NOT BROUG HT TO THE NOTICE OF 16 I.T.A. NOS.1535 TO 1537/MDS/14 THIS TRIBUNAL WHILE DECIDING THE ASSESSEE'S OWN CAS E FOR ASSESSMENT YEAR 2007-08 AND ALSO THE DECISION OF SR I MARIAMMAN EDUCATIONAL HEALTH AND CHARITABLE TRUST (SUPRA). I N FACT, THIS TRIBUNAL EXAMINED THE ISSUE ELABORATELY IN THE ANJU MAN-E- HIMAYATH-E-ISLAM V. ADIT IN I.T.A. NO.2271/MDS/2014 BY ORDER DATED 2 ND JULY, 2015 AND FOUND THAT WHEN THE ASSESSEE IS ELI GIBLE FOR EXEMPTION UNDER SECTION 11 OF THE ACT, IT IS NO T ELIGIBLE FOR DEPRECIATION UNDER SECTION 32 OF THE ACT. FOR THE PURPOSE OF CONVENIENCE, WE ARE REPRODUCING THE DECISION TAKEN BY THE CO- ORDINATE BENCH OF THIS TRIBUNAL IN THE ANJUMAN-E-HI MAYATH-E-ISLAM (SUPRA):- 5.2 WE FIND THIS ISSUE IS ELABORATELY DISCUSSED IN T HE CASE OF LISSIE MEDICAL INSTITUTION VS. CIT REPORTED IN [2012] 348 ITR 344(KER.) AND HELD THE ISSUE AGAINST THE ASSESSEE. WHILE DOI NG SO, THE HONBLE KERALA HIGH COURT HAD CONSIDERED THE CIRCULAR NO.5P(LLX-6) DATED 19.06.1968 WHICH HAS NOT BEEN CONSIDERED BY THE OTHER DECISIONS. THE CIRCULAR NO. 5P(LLX-6) IS RE PRODUCED HEREIN BELOW FOR REFERENCE:- 1. CIRCULAR NO. 5-P (LXX-6) OF 1968, DATED 19-6-196 8. SUBJECT : SECTION 11CHARITABLE TRUSTSINCOME REQUI RED TO BE APPLIED FOR CHARITABLE PURPOSEINSTRUCTIONS REGARDI NG. IN BOARD'S CIRCULAR NO. 2-P(LXX-5) OF 1963, DATED T HE 15TH MAY, 1963, IT WAS EXPLAINED THAT A RELIGIOUS OR CHARITAB LE TRUST CLAIMING EXEMPTION UNDER SECTION 11(1) OF THE INCOME- TAX AC T, 1961, MUST SPEND AT LEAST 75 PER CENT OF ITS TOTAL INCOME, FOR RELIGIOUS OR CHARITABLE PURPOSES. IN OTHER WORDS, IT WAS NOT PER MITTED TO 17 I.T.A. NOS.1535 TO 1537/MDS/14 ACCUMULATE MORE THAN 25 PER CENT OF ITS TOTAL INCOM E. THE QUESTION HAS BEEN RECONSIDERED BY THE BOARD AND THE CORRECT LEGAL POSITION IS EXPLAINED BELOW. 2. SECTION 11(1) PROVIDES THAT SUBJECT TO THE PROVI SIONS OF SECTIONS 60 TO 63 'THE FOLLOWING INCOME SHALL NOT BE INCLUDED I N THE TOTAL INCOME OF THE PREVIOUS YEAR . . . '. THE REFERENCE IN SUB- SECTION (A) IS INVARIABLY TO 'INCOME' AND NOT TO 'TOTAL INCOME'. THE EXPRESSION 'TOTAL INCOME' HAS BEEN SPECIFICALLY DEFINED IN SECTION 2(45) OF THE ACT AS 'THE TOTAL AMOUNT OF INCOME . . . COMPUTED I N THE MANNER LAID DOWN IN THIS ACT'. IT WOULD ACCORDINGLY BE INCORRECT TO ASSIGN TO THE WORD 'INCOME' USED IN SECTION 11(1)(A), THE SAM E MEANING AS HAS BEEN SPECIFICALLY ASSIGNED TO THE EXPRESSION 'TOTAL INCOME' VIDE SECTION 2(45). 3. IN THE CASE OF A BUSINESS UNDERTAKING HELD UNDER TRUST, ITS 'INCOME' WILL BE THE INCOME AS SHOWN IN THE ACCOUNT S OF THE UNDERTAKING. UNDER SECTION 11(4), ANY INCOME OF THE BUSINESS UNDERTAKING DETERMINED BY THE INCOME-TAX OFFICER IN ACCORDANCE WITH THE PROVISIONS OF THE ACT, WHICH IS IN EXCESS OF TH E INCOME AS SHOWN IN ITS ACCOUNTS, IS TO BE DEEMED TO HAVE BEEN APPLI ED TO PURPOSES OTHER THAN CHARITABLE OR RELIGIOUS, AND HENCE IT WI LL BE CHARGED TO TAX UNDER SUB-SECTION (3). AS ONLY THE INCOME DISCLOSED BY THE ACCOUNT WILL BE ELIGIBLE FOR EXEMPTION UNDER SECTION 11(1), THE PERMITTED ACCUMULATION OF 25 PER CENT WILL ALSO BE CALCULATED WITH REFERENCE TO THIS INCOME. 4. WHERE THE TRUST DERIVES INCOME FROM HOUSE PROPER TY, INTEREST ON SECURITIES, CAPITAL GAINS, OR OTHER SOURCES, THE WO RD 'INCOME' SHOULD BE UNDERSTOOD IN ITS COMMERCIAL SENSE, I.E., BOOK INCOME , AFTER ADDING BACK ANY APPROPRIATIONS OR APPLICATIONS THER EOF TOWARDS THE PURPOSES OF THE TRUST OR OTHERWISE, AND ALSO AFTER ADDING BACK ANY DEBITS MADE FOR CAPITAL EXPENDITURE INCURRED FOR TH E PURPOSES OF THE TRUST OR OTHERWISE. IT SHOULD BE NOTED, IN THIS CON NECTION, THAT THE AMOUNTS SO ADDED BACK WILL BECOME CHARGEABLE TO TAX UNDER SECTION 18 I.T.A. NOS.1535 TO 1537/MDS/14 11(3) TO THE EXTENT THAT THEY REPRESENT OUTGOINGS F OR PURPOSES OTHER THAN THOSE OF THE TRUST. THE AMOUNTS SPENT OR APPLI ED FOR THE PURPOSES OF THE TRUST FROM OUT OF THE INCOME COMPUT ED IN THE AFORESAID MANNER, SHOULD BE NOT LESS THAN 75 PER CE NT OF THE LATTER, IF THE TRUST IS TO GET THE FULL BENEFIT OF THE EXEMPTI ON UNDER SECTION 11(1). 5. TO SUM UP, THE BUSINESS INCOME OF THE TRUST AS DISC LOSED BY THE ACCOUNTS PLUS ITS OTHER INCOME COMPUTED ABOVE, WILL BE THE 'INCOME' OF THE TRUST FOR PURPOSES OF SECTION 11(1) . FURTHER, THE TRUST MUST SPEND AT LEAST 75 PER CENT OF THIS INCOM E AND NOT ACCUMULATE MORE THAN 25 PER CENT THEREOF. THE EXCES S ACCUMULATION, IF ANY, WILL BECOME TAXABLE UNDER SEC TION 11(1). AFTER CONSIDERING THE CIRCULAR, THE HONBLE KERALA HIGH COURT HELD AS FOLLOWS:- HELD, THAT AFTER WRITING OFF THE FULL VALUE OF THE CAPITAL EXPENDITURE ON ACQUISITION OF ASSETS AS APPLICATION OF INCOME FOR CHARITABLE PURPOSES AND WHEN THE ASSESSEE AGAIN CLAIMED THE SAME AMOUNT IN THE F ORM OF DEPRECIATION, SUCH NOTIONAL CLAIM BECAME A CASH SURPLUS AVAILABLE WITH THE ASSESSEE, WHICH WAS OUTSIDE THE BOOKS OF ACCOUNT OF THE TRUST UNLESS IT WAS WRITTEN BACK WHICH WAS NOT DONE BY THE ASSESSEE. IT WAS NOT PERMISSIBLE FO R A CHARITABLE INSTITUTION TO GENERATE INCOME OUTSIDE THE BOOKS IN THIS FASHION A ND THERE WOULD BE VIOLATION OF SECTION 11(1)(A). IT WAS FOR THE ASSESSEE TO WRITE BACK THE DEPRECIATION AND IF THAT WAS DONE, THE ASSESSING OFFICER WOULD MODIFY T HE ASSESSMENT DETERMINING HIGHER INCOME AND ALLOW RECOMPUTED INCOME WITH THE DEPRECIATION WRITTEN BACK BY THE ASSESSEE TO BE CARRIED FORWARD FOR SUBSEQUEN T YEARS FOR APPLICATION FOR CHARITABLE PURPOSES. FURTHER HONBLE CALCUTTA HIGH COURT HAS HELD IN THE CASE DCIT VS. GIRDHARILAL SHEWNARAIN TANTIA TRUST REPORTED IN [1993] 199 ITR 15(CAL.) THAT THE INCOME CONTEMPLATED BY THE PROVISIONS OF SECTION 11 IS THE REAL INCOME AND NOT THE INCOME A S ASSESSED OR ASSESSABLE. RESPECTFULLY FOLLOWING THE DECISION OF THE HONBL E KERALA HIGH COURT AND TAKING CUE FROM THE DECISION OF THE HONBLE CALCUTTA HIGH COURT, WE DO NOT FIND ANY HESITATION TO CONFIRM THE ORDER OF THE LD. CIT(A) AND ALSO THE VIEWS EXPRESSED BY HIM IN HIS ORDER. ACCORDINGLY THIS APPEAL IS HELD IN FAVOUR OF THE REVENUE . 19 I.T.A. NOS.1535 TO 1537/MDS/14 12. APART FROM THAT, WHEN THE ASSESSEE CLAIMS THE C OST OF THE CAPITAL EXPENDITURE AS EXEMPTION UNDER SECTION 11 O F THE ACT, THEN THE COST OF THE CAPITAL ASSET BECOMES NIL. ADMITTE DLY, DEPRECIATION UNDER SECTION 32 OF THE ACT HAS TO BE ALLOWED ONLY ON WRITTEN DOWN VALUE OF THE ASSET. WHEN THE WRITTEN DOWN VALUE OF THE ASSET BECOMES NIL SINCE THE ENTIRE COST WAS ALLOWED AS AP PLICATION OF INCOME UNDER SECTION 11 OF THE ACT, THIS TRIBUNAL I S OF THE CONSIDERED OPINION THAT THERE CANNOT BE ANY FURTHER CLAIM FOR DEDUCTION UNDER SECTION 32 OF THE ACT. IN VIEW OF THE ABOVE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSE SSEE IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 32 OF THE ACT TOWARDS DEPRECIATION. HOWEVER, IT IS MADE CLEAR THAT THE A SSESSEE IS ELIGIBLE FOR EXEMPTION UNDER SECTION 11 OF THE ACT FOR ALL T HE ASSESSMENT YEARS UNDER CONSIDERATION. 13. NOW COMING TO ASSESSMENT YEARS 2009-10 AND 2010 -11, THE CLAIM OF THE ASSESSEE WAS REJECTED BY THE LOWER AUT HORITIES ON THE GROUND THAT THE REGISTRATION UNDER SECTION 12AA WAS CANCELLED AND IT WAS CONFIRMED BY THIS TRIBUNAL. THE LOWER AUTHO RITIES HAVE ALSO FOUND THAT THE ASSESSEE IS ENGAGED IN BUSINESS ACTI VITY. AS REGARDS THE CANCELLATION OF REGISTRATION, NOW THE MADRAS HI GH COURT HAS SET ASIDE THE ORDER OF THIS TRIBUNAL AND RESTORED THE R EGISTRATION UNDER 20 I.T.A. NOS.1535 TO 1537/MDS/14 SECTION 12AA OF THE ACT. THEREFORE, AS ON TODAY, T HE REGISTRATION UNDER SECTION 12AA IS RESTORED. 14. THE NEXT CONTENTION OF THE LD. D.R. THAT THE AS SESSEE IS ENGAGED IN BUSINESS ACTIVITY. WE HAVE CAREFULLY GO NE THROUGH THE PROVISIONS OF SECTION 2(15) OF THE ACT AND THE CIRC ULAR ISSUED BY THE CBDT. IN FACT, THE ASSESSEE HAS FILED A COPY OF TH E SAID CIRCULAR AT PAGE 1 OF ITS PAPER-BOOK. FOR THE PURPOSE OF CONVE NIENCE, WE ARE REPRODUCING SECTION 2(15) OF THE ACT HEREUNDER:- 2(15) CHARITABLE PURPOSE INCLUDES RELIEF OF THE POOR, EDUCATION, MEDICAL RELIEF, 79[PRESERVATION OF ENVIRONMENT (INCLUDING WATERSHEDS, FORESTS AND WILDLIFE) AND PRESERVATION OF MONUMENTS OR PLACES O R OBJECTS OF ARTISTIC OR HISTORIC INTEREST,] AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY : PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT O F GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PU RPOSE, IF IT INVOLVES THE CARRYING ON OF ANY ACTIVITY IN T HE NATURE OF TRADE, COMMERCE OR BUSINESS, OR ANY ACTIV ITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS, FOR A CESS OR FEE OR ANY OTHE R CONSIDERATION, IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION, OR RETENTION, OF THE INCOME FROM SUCH ACTIVITY ; PROVIDED FURTHER THAT THE FIRST PROVISO SHALL NOT A PPLY IF THE AGGREGATE VALUE OF THE RECEIPTS FROM THE ACTIVITIES REFERRED TO THEREIN IS TWENTY-FIVE LAKH RUPEES OR LESS IN THE PREVIOUS YEAR ; 21 I.T.A. NOS.1535 TO 1537/MDS/14 ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY IS ALSO ONE OF THE CHARITABLE PURPOSES INCLUDED IN SECTION 2(15 ) OF THE ACT. HOWEVER, PROVISO TO SECTION 2(15) OF THE ACT CLARIF IES THAT IF THE ASSESSEE INVOLVES IN CARRYING ON ANY ACTIVITY IN TH E NATURE OF TRADE, COMMERCE OR BUSINESS, OR RENDERING ANY ACTIVITY IN RELATION TO TRADE, COMMERCE OR BUSINESS, THE SAME SHALL NOT BE TREATED AS CHARITABLE PURPOSE. THE QUESTION ARISES FOR CONSIDERATION IS WHETHER THE ASSESSEE INVOLVES ITSELF IN ANY ACTIVITY IN THE NAT URE OF TRADE, COMMERCE OR BUSINESS OR ITS ACTIVITY WOULD AMOUNT T O RENDERING ANY SERVICE IN RELATION TO TRADE, COMMERCE OR BUSINESS. WE HAVE CAREFULLY GONE THROUGH THE OBJECT OF THE ASSESSEE-S OCIETY, A COPY OF WHICH IS AVAILABLE AT PAGES 62 TO 65 OF THE PAPER-B OOK. FOR THE PURPOSE OF CONVENIENCE, WE ARE REPRODUCING THE OBJE CT:- (A) TO TAKE OVER ON REGISTRATION UNDER THE SOCIETIE S REGISTRATION ACT XXI OF 1860 AND ASSUME THE AFFAIRS AN D ACTIVITIES OF THE MADRAS CRICKET ASSOCIATION, AS SU BSEQUENTLY APPELLATED AS TAMIL NADU CRICKET ASSOCIATION AND CO NTINUE AND TAKE OVER THE DUES TO AND ASSETS, LIABILITIES, COMM ITMENTS AND UNDERTAKINGS OF THE SAID MADRAS CRICKET ASSOCIATION . (B) TO MAINTAIN A GENERAL CONTROL OF THE GAME OF CR ICKET IN THE STATE AND THE UNION TERRITORY OF PONDICHERRY AND GI VE ITS DECISION ON ALL MATTERS CONCERNING THE SAME EITHER WHEN REFERRED TO OR SUO MOTO. THE ACTIVITIES WOULD BE CO NFINED TO INDIA. 22 I.T.A. NOS.1535 TO 1537/MDS/14 (C) TO SPREAD THE GAME THROUGHOUT THE STATE BY ORGA NIZING TOURNAMENTS, INCLUDING INTER-UNIVERSITY, INTER-SCHO OL AND INTER-ASSOCIATION MATCHES, TO EDUCATE YOUN SPORTSME N IN THE GAME GENERALLY AND ALSO IN THE FIELD OF PHYSICAL CU LTURE AND THE SPIRIT OF SPORTSMANSHIP. THE BENEFITS WOULD BE AVA ILABLE TO THE GENERAL PUBLIC IRRESPECTIVE OF CASTE, CREED, RE LIGION OR SEX. (D) TO MAINTAIN A LIBRARY OF BOOKS, PUBLICATIONS A ND PERIODICALS OF INTEREST OF SPORTSMEN AND TO DIFUSE KNOWLEDGE OF CRICKET AND ITS IDEALS OF SPORTSMANSHIP. (E) TO COMMUNICATE WITH PUBLIC AUTHORITIES AND VARI OUS SPORTS ORGANIZATIONS IN INDIA AND ABROAD AND CONCERT AND P ROMOTE MEASURES FOR THE DEVELOPMENT OF THE GAME AND TO PRO VIDE SOCIAL SECURITY SAFE GUARDS FOR THE P1AYERS, OFFICI ALS SUCH AS MANAGERS, COACHES, UMPIRES,, SELECTORS AND OTHERS W HO ARE DIRECTLY CONNECTED WITH THE GAME. (F) TO PROVIDE, ACQUIRE AND MAINTAIN SUITABLE PLACE S, PLAY- GROUNDS, BUILDINGS AND CLUB HOUSES TO AFFORD REQUIR ED FACILITIES FOR THE CRICKETERS, OFFICIALS SUCH AS MANAGERS, COA CHES, UMPIRES, SELECTORS AND OTHERS WHO ARE DIRECTLY CONN ECTED WITH THE GAME, MEMBERS TO ACQUIRE BY PURCHASE, LEAS E, HIRE OR OTHERWISE SUITABLE PLAYGROUNDS, STADIA AND ANY OTHE R PROPERTY, MOVABLE AND IMMOVABLE, RIGHTS OR PRIVILEGES TO THE SAME AND TO PROVIDE ALL AMENITIES THEREON FOR THE PROMOTION OF THE OBJECTS OF THE ASSOCIATION. (G) TO LAY OUR ANY GROUND FOR PLAYING THE GAME AND FOR OTHER PURPOSES AND TO PROVIDE PAVILION, CANTEEN AND OTHER CONVENIENCES AND AMENITIES IN CONNECTION THEREWITH AND FOR SUCH PURPOSE PURCHASE, LEASE OR OTHERWISE ACQUIRE T HE LAND AT SUCH PRICE OR RENT FOR SUCH PERIOD AND UPON SUCH TE RMS AND CONDITIONS AS MAY SEEM EXPEDIENT. (H) TO ESTABLISH PROMOTE OR ASSIST IN ESTABLISHING AND PROMOTING AND TO SUBSCRIBE TO AND BECOME A MEMBER O F ANY OTHER ASSOCIATION OR CLUB WHETHER INCORPORATED OR N OT WHOSE OBJECTS ARE SIMILAR OR IN PART TO THE OBJECTS OF TH E ASSOCIATION, THE ESTABLISHMENT OR PROMOTION OF WHIC H MAY BE BENEFICIAL TO THE ASSOCIATION AND IN PARTICULAR TO SUBSCRIBE TO, 23 I.T.A. NOS.1535 TO 1537/MDS/14 FINANCE, GIVE OR LEND MONEY TO, AND GUARANTEE THE C ONTRACTS OF THE BOARD OF CONTROL FOR CRICKET IN INDIA OR ANY OTH ER BODY FOR THE TIME BEING CONTROLLING THE GAME IN INDIA OR ANY PART THEREOF AND ANY STATE OR REGIONAL ASSOCIATION RECOG NIZED BY SUCH BODY. (I) TO CREATE, FOSTER AND MAINTAIN FRIENDLY RELATIO NS WITH AND AMONG THE POPULATION OF THE AREA UNDER ITS CONTROL THROUGH SPORTS, TOURNAMENTS AND COMPETITIONS CONNECTED THER EWITH, TO CREATE, DEVELOP AND FOSTER A HEALTHY SPIRIT OF SPOR TSMANSHIP AND A BROAD AND GENEROUS OUTLOOK DEVOID OF ALL PREJ UDICES AND TO MOULD THE CHARACTER OF CITIZEN THROUGH THE MEDIU M OF SPORTS IN GENERAL AND CRICKET IN PARTICULAR. (J) TO IMPART PHYSICAL EDUCATION THROUGH THE MEDIUM OF CRICKET AND TAKE ALL STEPS TO ASSIST THE CITIZENS TO DEVELO P THEIR PHYSIQUE AND HAVE A HEALTHY MIND AND HEALTHY BODY. (K) TO SPREAD THE IDEALS OF CRICKET AND ALL THAT IT STANDS FOR THROUGHOUT THE LENGTH AND BREADTH OF ITS AREA BY AR RANGING SCHOOLS FOR COACHING, LECTURES, TOURNAMENTS AND RUN INTERNATIONAL MATCHES BETWEEN INDIA AND OTHER LEADI NG FOREIGN COUNTRIES SO AS TO DEVELOP MUTUAL GOODWILL AND BETT ER UNDERSTANDING BETWEEN INDIA AND OTHER COUNTRIES. (L) . . .. .. .. .. .. .. .. . TIME TO RUN SUCH MATCHES FOR THE ACHIEVEMENT OF THE OBJECTS OF THE ASSOCIATION AND TO UTILIZE THE NET PROCEEDS THEREOF TOWARDS THE IMPLEMENTATION OF THE OBJECTS SET OUT H EREIN AND TO EDUCAT THE PUBLIC, THE SCHOOL BOYS, COLLEGE STUD ENTS, CLUBS AND CRICKETERS, IN CRICKET AND ALL THE IDEALS IT ST ANDS FOR. (M) TO HAVE AS MANY CLASSES OF MEMBERS WITH SUCH RI GHTS AS THE GENERAL BODY DECIDE. (N) TO INSTILL KEENNESS FOR THE GAME AND TO FOSTER THE SPIRIT OF SPORTSMANSHIP IN PROMISING STUDENTS OF SCHOOLS AND COLLEGES AND MEMBERS OF AFFILIATED CLUBS / DISTRICT ASSOCIAT IONS AND INSTITUTIONS AND THUS ENABLE THEM TO DEVELOP A GOOD PHYSIQUE AND A GOOD STANDARD OF THE GAME AND TO AFFORD FACIL ITIES TO THE POORER CLASSES OF CITIZENS TO ATTAIN EFFICIENCY IN THE GAME. 24 I.T.A. NOS.1535 TO 1537/MDS/14 (O) TO REGULATE AND CONTROL SPORTS IN GENERAL AND T HE GAME OF CRICKET IN PARTICULAR. (P) TO GIVE DECISIONS ON THE RELEVANT MATTERS REFER RD TO THE ASSOCIATION BY AFFILIATED CLUBS/DISTRICT ASSOCIATIO NS AND INSTITUTIONS AND, IF NECESSARY, TO FINANCE AND COND UCT MATCHES AND TOURS OF REPRESENTATIVE TEAMS VISITING ITS AREA ON INVITATION AND TO REGULATE AND CONTROL THE VISITS O F THE STATES REPRESENTATIVE TEAMS GOING OUT OF TAMIL NADU. (Q) TO ENCOURAGE THE FORMATION OF ZONES IN THE CITY OF MADRAS AND DISTRICT OR REGIONAL CLUBS IN EVERY DISTRICT OR PART OF A DISTRICT AND PLAYING FACILITIES IN ALL SUCH CENTRES . (R) TO SELECT TEAMS TO REPRESENT THE ASSOCIATION IN TOURNAMENTS, CHAMPIONSHIPS OR FIXTURES, LOCAL OR OTH ERWISE. (S) TO ACQUIRE BY ALL LAWFUL MEANS OF MOVABLE AND I MMOVABLE PROPERTY ON BEHALF OF THE ASSOCIATION AND TO SELL, MANAGE, MORTGAGE LEASE AND EXCHANGE, DISPOSE OFF OR OTHERWIS E DEAL WITH ALL OR ANY OF ITS PROPERTIES AND/OR ANY INCOME THEREFROM. (T) TO PROMOTE AND TO CONTRIBUTE TO ANY ENTERPRISE CONDUCTED BY INDIVIDUALS OR ASSOCIATIONS IN CONFORMITY WITH T HE OBJECTS OF THE ASSOCIATION. (U) TO ORGANIZE A PROPER COACHING SCHEME FOR THE BE NEFIT OF CRICKETERS IN THE CITY AND IN THE DISTRICTS UNDER T HE SUPERVISION OF COACHES FROM INDIA AND ABROAD. (V) TO COLLECT FUNDS AND WHENEVER NECESSARY BORROW WITH OR WITHOUT SECURITY FOR PURPOSES OF THE ASSOCIATION AN D IN PARTICULAR BY THE ISSUE OF DEBENTURES OR DEBENTURE STOCK PERPETUAL OR OTHERWISE CHARGED UPON ALL OR ANY OF T HE ASSOCIATIONS PROPERTY BOTH OR FUTURE AND TO PURCHA SE, REDEEM OR PAYOFF ANY SUCH SECURITIES AND TO UTILIZE SUCH F UNDS IN SUCH MANNER AS THE GENERAL BODY MAY CONSIDER DESIRABLE FO R THE FULFILLMENT OF THE OBJECTS OF THE ASSOCIATION. 25 I.T.A. NOS.1535 TO 1537/MDS/14 (W) TO INVEST MONIES AND FUNDS OF THE ASSOCIATION A S PER SECTION 11(5) OF THE INCOME-TAX ACT, 1961 AND TO RECON VERT IN SUCH MANNER AS MAY BE DECIDED UPON BY THE GENERAL BO DY OF THE MEMBERS OF THE ASSOCIATION FROM TIME TO TIME. (X) TO CARRY OUT ANY OTHER BUSINESS OR ACTIVITY WHIC H MAY SEEM TO THE COMMITTEE CAPABLE OF BEING CONVENIENTLY CARR IED OUT IN CONNECTION WITH AND IN CONFORMITY TO THE OBJECTS OF THE ASSOCIATION AND WHICH IS CONNECTED DIRECTLY OR INDI RECTLY TO ENHANCE THE VALUE OF OR RENDER MORE PROFITABLE ANY OF THE OBJECTS, RIGHTS OR PROPERTIES OF THE ASSOCIATION. (Y) TO MAINTAIN A PANEL OF APPROVED CRICKET UMPIRES AND TO DO SUCH ACTS AS MAY BE NECESSARY FOR THIS PURPOSE INCL UDING HOLDING OF PRESCRIBED PERIODICAL TESTS WITH A VIEW TO ENABLE THEM TO QUALIFY THEMSELVES AS FIRST CLASS UMPIRES. (Z) TO ADD, DELETE, ALTER, MAINTAIN AND ENFORCE RUL ES AND REGULATIONS FOR THE CONTROL AND GOVERNANCE OF THE G AME IN THE STATE OF TAMIL NADU AND THE UNION TERRITORY OF POND ICHERRY AND TO MAINTAIN DISCIPLINE AMONGST PLAYERS, OFFICIA LS, CLUBS AND AFFILIATED INSTITUTIONS. THE OBJECT OF THE ASSESSEE-SOCIETY IS TO CONTROL GA ME OF CRICKET IN THE STATE OF TAMIL NADU AND IN THE UNION TERRITORY OF PUDUCHERRY AND ALSO TO ORGANIZE TOURNAMENTS, INCLUDING INTER-U NIVERSITY, INTER- SCHOOL AND INTER-ASSOCIATION MATCHES, TO EDUCATE YO UNG SPORTSMEN IN THE GAME GENERALLY AND ALSO IN THE FIELD OF PHYS ICAL CULTURE AND THE SPIRIT OF SPORTSMANSHIP. THEREFORE, THE SOLE O BJECT OF THE ASSESSEE-SOCIETY IS TO PROMOTE SPORT OF CRICKET IN THE STATE OF TAMIL NADU AND IN THE UNION TERRITORY OF PUDUCHERRY. 26 I.T.A. NOS.1535 TO 1537/MDS/14 15. NOW, LETS EXAMINE WHETHER THE ACTIVITY OF COND UCTING ONE- DAY MATCHES, T-20 MATCHES AND INDIAN PREMIER LEAGUE MATCHES WOULD AMOUNT TO DOING BUSINESS OR TRADE. IT IS THE CASE OF THE REVENUE THAT THE ASSESSEE-SOCIETY IS CONDUCTING OR ORGANIZING T- 20, ONE-DAY MATCHES OR INDIAN PREMIER LEAGUE MATCHE S. IN FACT, BCCI, THE PARENT ORGANIZATION WHICH IS A NATIONAL B ODY IN INDIA, IS ORGANIZING AND CONDUCTING THE MATCHES. THE ASSESSE E-SOCIETY, BEING A MEMBER OF BCCI, HOSTS THE MATCHES WHICH ARE CONDUCTED BY BCCI. FOR THE PURPOSE OF MEETING ITS EXPENDITUR E, THE BCCI ALLOCATES FUNDS FROM THE REVENUE IT COLLECTED FROM ADVERTISEMENT AND OTHER SOURCES. THE ASSESSEE-SOCIETY IS ALLOWED TO SELL TICKETS TO THE CRICKET VIEWERS. NO DOUBT, THE PLAYERS OF I NDIAN PREMIER LEAGUE ARE SOLD IN PUBLIC AUCTION FOR VERY HUGE AMO UNT. BUT THE QUESTION IS WHO IS CONDUCTING AND WHO IS AUCTIONING , WHETHER THE ASSESSEE-SOCIETY OR BCCI? IN FACT, BCCI CONDUCTS T HE PUBLIC AUCTION FOR SELLING PREMIER PLAYERS AT A HUGE PREMI UM RATE. IN FACT, THE BCCI COLLECTS THE MONEY. THE ROLE OF THE ASSES SEE-SOCIETY IS ONLY TO PROVIDE STADIUM FOR CONDUCTING MATCHES. OT HER THAN THAT, THE ASSESSEE-SOCIETY HAS NO ROLE IN CONDUCTING THE INTERNATIONAL MATCHES AND INDIAN PREMIER LEAGUE MATCHES. 27 I.T.A. NOS.1535 TO 1537/MDS/14 16. THE OTHER ACTIVITY OF THE ASSESSEE-SOCIETY IS T O CONDUCT TRAINING PROGRAMMES, COACHING CLASSES FOR COLLEGE S TUDENTS AT DISTRICT LEVEL IN THE STATE OF TAMIL NADU AND IN TH E UNION TERRITORY OF PUDUCHERRY. THE ASSESSEE IS ALSO CONDUCTING INTER- UNIVERSITY, INTER- SCHOOL AND INTER-ASSOCIATION MATCHES. EXPENDITURES INVOLVED IN SUCH ACTIVITIES WERE MET OUT OF SURPLUS FUNDS REMAI NING WITH THE ASSESSEE-SOCIETY. THE ASSESSING OFFICER GOT CONFUS ED HIMSELF WITH THE ACTIVITY CARRIED ON BY THE BCCI AS THAT OF THE ACTIVITY CARRIED ON BY THE ASSESSEE-SOCIETY. THE MATERIAL AVAILABLE ON RECORD SHOWS THAT ONE-DAY MATCHES, T-20 MATCHES AND INDIAN PREMI ER LEAGUE MATCHES ARE ALL CONDUCTED BY THE BCCI AND THE ASSES SEE, BEING THE HOST IN THE STATE OF TAMIL NADU, IS ONLY PROVIDING ITS STADIUM. THE ASSESSEE HAS ALSO RECEIVED FUNDS FROM BCCI FOR MEET ING THE EXPENDITURE, BEING THE HOST. THEREFORE, THIS TRIBU NAL IS OF THE CONSIDERED OPINION THAT AT ANY STRETCH OF IMAGINATI ON, IT CANNOT BE SAID THAT THE ASSESSEE IS CONDUCTING ANY BUSINESS A CTIVITY. THE ASSESSEE IS ALSO NOT PROVIDING ANY SERVICE TO ANY T RADE, COMMERCE OR INDUSTRY. IN THOSE CIRCUMSTANCES, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT PROVISO TO SECTION 2(15) OF THE ACT IS NOT APPLICABLE TO THE ASSESSEE. IN VIEW OF THE ABOVE D ISCUSSION, THE ASSESSEE IS ELIGIBLE FOR EXEMPTION UNDER SECTION 11 OF THE ACT FOR ALL THE ASSESSMENT YEARS UNDER CONSIDERATION. ACCORDI NGLY, THE ORDERS 28 I.T.A. NOS.1535 TO 1537/MDS/14 OF THE LOWER AUTHORITIES FOR ASSESSMENT YEARS 2009- 10 AND 2010- 11ARE SET ASIDE AND THE ASSESSING OFFICER IS DIRECT ED TO GRANT EXEMPTION UNDER SECTION 11 OF THE ACT. THE ASSESS ING OFFICER IS ALSO DIRECTED TO GRANT EXEMPTION UNDER SECTION 11 O F THE ACT FOR THE ASSESSMENT YEAR 2008-09 ALSO. 17. IN THE RESULT, THE ASSESSEES APPEAL FOR ASSESS MENT YEAR 2008-09 IN I.T.A. NO.1535/MDS/2014 IS PARTLY ALLOWE D. HOWEVER, FOR ASSESSMENT YEARS 2009-10 AND 2010-11 IN I.T.A. NOS. 1536 & 1537/MDS/2014 ARE ALLOWED. ORDER PRONOUNCED ON 14 TH AUGUST, 2015 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 14 TH AUGUST, 2015. KRI. . ,156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. 0 81 () /CIT(A)-VII, CHENNAI-34 4. DIT (EXEMPTIONS), CHENNAI 5. 69 ,1 /DR 6. :' ; /GF.