SUNIL GAVASKAR, MUMBAI V. ITO (IT) 3(1), MUMBAI

ITA 3970/MUM/2010

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3316 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 9 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 21-01-2016
• Assessment Year: 2001-2002
• Appeal Filed On: 17-05-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Salary income; Audit objection; Wrong claim; Difference of opinion; Competent authority; Assessment record; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 234B; 147; 148; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.3970/MUM./2010 (ASSESSMENT YEAR : 200102 ) ITA NO.3971/MUM./2010 (ASSESSMENT YEAR : 200203 ) SHRI SUNIL GAVASKAR 8A, SPORTSFIELD KHAN ABDUL GAFFOR KHAN ROAD WORLI, MUMBAI 400 018 PAN AAAPG0001B . APPELLANT V/S INCOME TAX OFFICER (I.T) WARD3(1), MUMBAI . RESPONDENT ASSESSEE BY : SHRI D.V. LAKHANI REVENUE BY : SHRI NITIN WAGHMADE DATE OF HEARING 21.01.2016 DATE OF ORDER 16.03.2016 O R D E R PER ASHWANI TANEJA, A.M. THESE APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAINST SEPARATE ORDERS OF THE LEARNED COMMISSIONER (APPEALS) 10, 2 SHRI SUNIL GAVASKAR MUMBAI, PASSED AGAINST THE SEPARATE ASSESSMENT ORDERS UNDER SECTION 143(3) R/W SECTION 147 OF THE INCOME TAX ACT, 1 961 (FOR SHORT 'THE ACT' ) FOR THE ASSESSMENT YEAR 200102 AND 200203. 2. SINCE BOTH THE APPEALS PERTAIN TO SAME ASSESSEE AND INVOLVE IDENTICAL ISSUES, THEREFORE, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 3. WE FIRST TAKE UP APPEAL IN ITA NO.3970/MUM/2010, FOR T HE ASSESSMENT YEAR 200102. ASSESSEE HAS RAISED FOLLOWING GROUNDS: 1. ON THE FACTS & CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONCLUDING THAT NOTICE ISSUED U/S 148 IS V ALID AND THE REASSESSMENT PROCEEDINGS ARE VALIDLY INITIATED. HE HAS ALSO ERRED IN HOLDING THAT REOPEN ING THE ASSESSMENT WAS IN ORDER. THE APPELLANT PRAYS TH AT THE NOTICE ISSUED U/S 148 IS BAD IN LAW. THE CONDIT IONS STIPULATED U/S 147 ARE NOT SATISFIED. THE REASSESSMENT ORDER PASSED BY THE LEARNED AO MAY BE TREATED AS INVALID. THE APPELLANT PRAYS THAT REASSESSMENT ORDER PASSED BY THE LEARNED AO MAY BE CANCELLED. 2. WITHOUT PREJUDICE TO GROUND NO.1 THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN REJECTING THE CLAIM OF THE APPELLANT U/S 8ORR AMOUNTING TO RS.97,71,079/-. ON THE FACTS & CIRCUMSTANCES OF THE CASE THE APPELLANT SUBMIT THAT HE IS ENTITLED TO DEDUCTION U/S 8ORR AT RS.97,7 1,079/- 3 SHRI SUNIL GAVASKAR AS ALL THE CONDITIONS STIPULATED U/S 80RR ARE SATISFIE D. 3. ON THE FACTS & CIRCUMSTANCES OF THE CASE THE APPELLANT PRAYS THAT DEDUCTION U/S 8ORR MAY BE GRANTED AT RS.97,71,079/-. 4. ON THE FACTS & CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE LEVY OF INTEREST U/S 234B AT RS. 38,07,838/-. THE APPELLANT DENIES THE LIABILITY FOR PAYMENT OF INTEREST U/S 234B AND PRAYS THAT THE INTEREST LEVY AT RS.38,07,838/- MAY BE DELETED. 4. DURING THE COURSE OF HEARING, DETAILED ARGUMENTS HAVE BEEN MADE BY BOTH THE SIDES ON THE GROUNDS RAISED BEFORE U S. IT IS NOTED FROM THE PERUSAL OF THE RECORD THAT ON AN EAR LIER DATE, IT WAS POINTED OUT BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT AN INSPECTION OF ASSESSMENT RECORD WAS C ARRIED OUT BY HIM WHEREIN IT WAS NOTED THAT THERE WERE CERTAIN G LARING DISCREPANCIES IN COMPLIANCE OF THE LAW TO BE FOLLOWED FOR THE REOPENING OF THE ALREADY CONCLUDED ASSESSMENT. ACCORDI NGLY, THE BENCH HAD DIRECTED THE LD. DR TO PRODUCE THE ASSESSMEN T RECORDS. IN ACCORDANCE WITH THE SAME, LEARNED DR PRODUCE D BEFORE US ASSESSMENT RECORDS CONTAINING, INTERALIA , DOCUMENTATION WORK DONE BY THE DEPARTMENT FOR REOPENING OF THE CASE, WHICH WAS EXAMINED BY US. LD. DR SUBMITTED COP IES OF REASONS RECORDED BY THE AO AND OTHER SUPPORTING MATERIAL TO THE BENCH WITH ONE COPY TO THE COUNSEL OF THE ASSESSEE. THE CASE WAS ADJOURNED TO NEXT DATE TO ENABLE BOTH THE PARTI ES TO FILE THEIR RESPECTIVE REPLIES. ACCORDINGLY, ON THE DA TE OF HEARING, 4 SHRI SUNIL GAVASKAR PARTIES MADE THEIR RESPECTIVE SUBMISSIONS ON THE JURIS DICTIONAL AND OTHER LEGAL ASPECT OF THE REOPENING AS WELL AS ON THE MERITS OF THE CASE. 5. THE LEARNED COUNSEL FOR THE ASSESSEE HAS MADE DETAILED ARGUMENTS TO ASSAIL THE REOPENING DONE BY THE AO AS WELL AS MERITS OF ADDITIONS/DISALLOWANCES. HE RELIED UPON VARI OUS JUDGMENTS TO ARGUE THAT REOPENING WAS ILLEGAL AND THE DISALLOWANCE WAS ALSO BAD IN LAW AND FACTUALLY INCORRECT . HE TOOK US THROUGH THESE JUDGMENTS IN SUPPORT OF HIS ARGUMENT THAT ASSESSEE IS VERY MUCH ELIGIBLE AS PER LAW TO CLAI M DEDUCTION UNDER SECTION 80RR AND INCONSISTENT STAND OF THE REVENUE IS NOT ONLY LEGALLY INVALID BUT ALSO CAUSING UND UE HARDSHIP TO A TAX PAYER WHOSE SERVICES HAVE BROUGHT FAM E TO THE ENTIRE COUNTRY. BEFORE CONCLUDING HIS ARGUMENT HE ALSO DREW OUR ATTENTION UPON THE ADVISORY ISSUED BY THE MINISTR Y OF FINANCE, DEPARTMENT OF REVENUE, DATED 24 TH JUNE 1982, WHEREIN IT WAS OPINED THAT AUDIT OBJECTION SHOULD NOT BE F ORMED THE BASIS OF REOPENING OF AN ASSESSMENT. HE ALSO RELIE D UPON THE CIRCULAR OF THE CBDT NO.554 DATED 13 TH FEBRUARY 1990. THUS, HE CONCLUDED HIS ARGUMENT BY SUBMITTING THAT NEITHER T HE REOPENING NOR THE ADDITION MADE BY THE AO WAS VALID AND, THEREFORE, REOPENING SHOULD BE QUASHED AND ADDITIONS SHOULD BE DELETED. 5 SHRI SUNIL GAVASKAR 6. PERCONTRA, THE LEARNED DR APPEARING ON BEHALF OF THE REVENUE HAS ALSO MADE DETAILED ARGUMENTS. HE WAS FAIR ENOUGH TO ACCEPT THAT TWO SETS OF REASONS WERE AVAILABLE IN RECORDS. UNDATED REASONS WERE APPROVED / SANCTIONED BY THE ADDITIONAL DIT AND THEN ALSO BY THE DIT ON 25 TH MAY 2007. HE FAIRLY ADMITTED THAT NOTHING WAS AVAILABLE IN ASSESSMENT RECORD TO SHOW ANY APPROVAL / SANCTION OF A COMPETENT AUTHORITY W ITH REGARD TO THE REASONS DATED 6 TH JUNE, 2007. IT HAS BEEN ARGUED BY HIM THAT VARIANCE IN THE REASONS DOES NOT HAVE ANY MATERIAL EFFECT. IT WAS FURTHER SUBMITTED THAT THE ADD ITIONAL DIT AS WELL AS THE DIT HAVE GONE THROUGH THE ENTIRE RECORDS BEF ORE GRANTING THEIR APPROVAL AND THUS DUE PROCEDURE WAS FOLLOWE D BEFORE REOPENING OF THE ASSESSMENT. IT WAS FURTHER SUBMI TTED THAT THE AO DID NOT FORM ANY SPECIFIC OPINION DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS AND, THEREFORE, THER E ARISES NO QUESTION OF ANY CHANGE OF OPINION. ON MERITS, IT WAS SUBMITTED BY THE LEARNED DR THAT IN SECTION 80RR, WHAT HAS BEEN ENVISAGED IS A SPORTSMAN, AND ASSESSEE WAS NOT A SPORTSMAN DURING THE YEAR. IT WAS FURTHER SUBMITTED THAT CRICKET COMMENTARY IS NOT AN ART. IN SUPPORT OF HIS ARGUM ENTS, HE PLACED RELIANCE UPON THE JUDGMENT OF THE TRIBUNAL IN HARSHA BHOGLE, 114 TTJ 266. 7. IN REPLY TO THE ARGUMENT OF THE LEARNED DR, LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE LEARNED DR HAS NOT BEEN ABLE TO MEET OR COUNTER VARIOUS ARGUMENTS OF LE ARNED 6 SHRI SUNIL GAVASKAR COUNSEL FOR THE ASSESSEE WITH RESPECT TO JURISDICTION LAP SES COMMITTED BY THE AO BEFORE REOPENING OF THE ASSESSME NT AS WELL AS ON MERITS OF THE CASE. 8. WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF THE LOWER AUTHORITIES, ARGUMENTS MADE, EVIDENCES SHOWN AND JUDGMENTS RELIED UPON BEFORE US, BY BOTH THE PARTIES. 9. WE SHALL FIRST DEAL WITH THE ARGUMENTS MADE BY BOTH THE PARTIES BEFORE US WITH REGARD TO THE REOPENING OF THE CA SE. THE FOREMOST ISSUE AS WAS RAISED BEFORE US IS WITH REGARD TO EXISTENCE OF TWO SETS OF REASONS . THE ASSESSMENT RECORDS WERE PRODUCED BY THE LEARNED DR DURING THE COURSE OF HEAR ING BEFORE US. SURPRISINGLY, THERE DO EXIST TWO SETS OF REASONS. THE FIRST SET OF REASONS IS UNDATED WHICH IS APPROVED BY THE ADDITIONAL-DIT(IT), RANGE3, MUMBAI, ON 24 TH MAY 2007 AND WAS FORWARDED FOR FURTHER APPROVAL BY THE DIT. ACCOR DINGLY, DIT(IT), MUMBAI, GRANTED SANCTION OF THE SAME ON 25 TH MAY 2007, BY MAKING DETAILED REASONING IN HIS OWN HANDWRITIN G. IT IS NOTED THAT WHILE GIVING REASONING, THE DIT HAD RAISE D FEW NEW ASPECTS WHICH WERE NOT RAISED BY THE AO IN THE REASONS RECORDED VIZ, SOME DIFFERENCE IN INCOME SHOWN IN THE RETUR N OF INCOME AND AMOUNT SHOWN IN THE REMITTANCE CERTIFICATE AND A CHANGE IN METHOD OF ACCOUNTING BY THE ASSESSEE. IT IS NOTED THAT SUBSEQUENT TO THE SANCTION GRANTED BY THE DIT, THE A O RECORDED ANOTHER SET OF REASONS DATED 6 TH JUNE 2007. THIS SET OF REASONS APPEARS TO HAVE BEEN PROVIDED TO THE ASSESSEE 7 SHRI SUNIL GAVASKAR DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR INVITING HIS OBJECTIONS. BUT, WE COULD NOT FIND ANYTHING IN THE ASSE SSMENT RECORDS AND NOTHING WAS SHOWN TO US INDICATING ANY APPROVAL / SANCTION FROM THE COMPETENT AUTHORITY UNDER SECTION 151(1) WITH RESPECT TO THIS SET OF REASONS DATED 6 TH JUNE 2007. THUS, ADMITTEDLY, AS PER RECORDS, THE REOPENING HAS BEEN DON E WITHOUT COMPLYING WITH THE MANDATORY JURISDICTIONAL CONDITI ON OF SECTION 151. THUS, REOPENING BECOMES BAD ON THIS GROUND ITSELF. IT IS FURTHER NOTED BY US THAT THE FIRST SET OF REASONS (UNDATED REASONS) WHICH WERE GOT SANCTIONED FROM THE COMPETENT AUTHORITY WERE NEITHER FURNISHED TO THE ASSESSE E NOR THESE HAVE BEEN USED / CONSIDERED BY THE AO FOR REOPENI NG OF THE ASSESSMENT AND, THEREFORE, THESE CANNOT BE CONSIDERED NOW AT THIS STAGE FOR EXAMINING THE VALIDITY OF THE REOPENI NG. 10. THE SECOND ISSUE RAISED BY THE LEARNED COUNSEL FOR TH E ASSESSEE IS THAT THERE WAS SOME AUDIT OBJECTION RAISED BY THE AUDIT TEAM IN ITS DRAFT REVIEW REPORT ON ELIGIBILITY O F THE ASSESSEE TO CLAIM DEDUCTION UNDER SECTION 80RR. WITH THE ASSISTANCE OF BOTH THE PARTIES, IT IS NOTED THAT THERE IS A LETTER DATED 29 TH SEPTEMBER 2006, RETURNED BY THE ASSESSING OFFICER TO THE CIT, CITY5, MUMBAI, ON THE SUBJECT OF REVIEW ON ASSESSMENT OF SELECTED COMPANIES IN SELECTED SECTORS I N THE CASE OF SHRI SUNIL GAVASKAR A.Y. 200001 TO 200203 COMMENTS REG. ONE RELEVANT PARA FROM THE SAID LETTER IS REPRODUCED HEREUNDER: 8 SHRI SUNIL GAVASKAR AT THE OUTSET IT IS SUBMITTED THAT WHEN THE RETURNS FOR A.Y. 200001 & 200203 ARE PROCESSED UNDER SECTION 143(1) OF I.T. ACT, 1961 AND THE ADJUSTMENT POINTED BY THE AUDIT ARE NOT PERMISSIBLE WHILE PROCESSING THE RETURN U/S 143(1), HENCE, IN PRINCIPLE THE OBJECTIONS RAISED BY THE AUDIT ARE NOT ACCEPTABLE FOR THESE TWO YEARS. HOWEVER, SINCE THE ISSUE INVOLVED IN ALL THE THRE E ASSESSMENT YEARS IS OF DEBATABLE IN NATURE, FURTHER NECESSARY ACTION IN THIS CASE WILL BE TAKEN AFTER CARRYI NG OUT NECESSARY VERIFICATION. A FINAL REPLY WILL BE SENT TO THE AUDIT IN DUE COURSE. 10.1. THE PERUSAL OF THE AFORESAID PARAGRAPH WOULD SHOW THAT THE AO HIMSELF FOUND THAT THE ISSUE WAS DEBATABLE IN NATUR E. THE REQUIREMENT OF LAW FOR REOPENING OF THE CASE IS THA T THE AO SHOULD BE IN A POSITION TO FORM A BELIEF ABOUT ESCAPEME NT OF INCOME. ALTHOUGH, IT IS TRUE THAT AT THE STAGE OF REOPENI NG, THE BELIEF NEED NOT BE CONCLUSIVE, BUT IT IS EQUALLY EXPECT ED THAT THE POSITION OF LAW SHOULD BE CLEAR IN THE MIND OF THE AO, A T LEAST PRIMAFACIE. THE BELIEF NEED NOT BE CONCLUSIVE BUT IT SHOULD BE FIRM AND CLEAR. NO BELIEF CAN BE FORMED OUT OF CONFUSION AND DOUBTFUL THOUGHTS. IF THIS KIND OF SITUATION IS ALLOWED T O BE SUSTAINABLE IN LAW, THEN IT IS QUITE POSSIBLE THAT THERE WILL BE EXPERIMENTS BY THE REVENUE OFFICIALS BY REOPENING THE C ASE OF ANY ASSESSEE AT THEIR WHIMS AND FANCIES AND THAT TOO ON THE BASIS OF DOUBTS AND SUSPICIONS AND WITHOUT COMPLYING WITH JURISDICTIONAL AND OTHER PROCEDURAL REQUIREMENTS OF LAW. THE RE ASSESSMENT PROCEEDINGS ARE NOT MEANT TO MAKE FISHING ENQUIRIES AND TO EXPERIMENT WITH THE LEGAL ISSUES. IN THI S REGARD, THE POSITION OF LAW IS WELL SETTLED BY MANY JUDGMENTS 9 SHRI SUNIL GAVASKAR COMING FROM VARIOUS HIGH COURTS. WE FIND SUPPORT OF OUR VIEW FROM THE JUDGMENT OF HON'BLE JURISDICTIONAL HIGH COURT IN IL AND FS INVESTMENTS MANAGERS LTD. V/S ITO, 298 ITR 32 (B OM.) WHEREIN IT WAS HELD BY THE HON'BLE JURISDICTIONAL HIGH COUR T THAT WHERE THE AO HIMSELF DISAGREED WITH THE AUDIT OBJECTIO N, UNDER SUCH CIRCUMSTANCES, THERE COULD NOT HAVE BEEN VALID BASI S TO REOPEN THE ALREADY CONCLUDED ASSESSMENT. THIS JUDGMENT HAS BEEN RECENTLY FOLLOWED AGAIN BY HONBLE BOMBAY HIGH COUR T TO REITERATE THIS POINT IN THE CASE OF M/S RELIANCE INDUSTRIES LTD. (DT. 1ST FEBRUARY, 2016 IN ITA 2000 OF 2013). S OME OF THE USEFUL OBSERVATIONS OF HONBLE JURISDICTIONAL HIGH COURT A RE REPRODUCED BELOW: THE JURISDICTIONAL REQUIREMENTS TO REOPEN AN ASSESSMENT ARE: (I) THE AO MUST HAVE REASON TO BELIEVE THAT THE INCOME CHARGEABLE TO TAX ESCAPED ASSESSMENT; (II) THE AO IN THE REGULAR ASSESSMENT PROCEEDINGS HAD NOT FORMED AN OPINION IN REGARD TO THE ISSUE ON WHICH THE REOPENING NOTICE IS ISSUED; AND (III) THERE HAS BEEN A FAILURE ON THE PART OF THE ASSESS EE TO TRULY AND FULLY DISCLOSE ALL NECESSARY FACTS FOR THE ASSESSMENT. 5. IN THIS CASE, THE CIT (A) AS WELL AS THE TRIBUNAL HAV E, ON CONSIDERATION OF THE FACTS ARISING BEFORE THEM, HA VE CONCLUDED THAT NONE OF THE THREE CONDITIONS PRECEDENT HAVE BEEN SATISFIED. THE REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT ON THE PART OF 10 SHRI SUNIL GAVASKAR THE AO IS A SINE QUA NON FOR ISSUE OF A REOPENING ASSESSMENT UNDER SECTION 148 OF THE ACT AS NON- SATISFACTION OF REASON TO BELIEVE WOULD BY ITSELF MAKE THE NOTICE FATAL. IN SUCH A CASE, THE SATISFACTION OF OTHER CONDITIONS WOULD NOT EVEN REQUIRE EXAMINATION. 6. BOTH THE CIT(A) AS WELL AS THE TRIBUNAL, ON THE AFORESAID BASIS CAME TO THE CONCLUSION THAT IN VIEW OF TH E FACT THAT THE AO HIMSELF HAS NOT ACCEPTED THE AUDIT OBJECTION, THERE COULD BE NO REASON FOR HIM TO BELIEVE T HAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. IT IS CLEAR FROM SECTION 147 OF THE ACT THAT THE JURISDICTI ONAL REQUIREMENT TO ISSUE A NOTICE FOR REOPENING THE ASSESSMENT IS THE SATISFACTION OF THE AO. THIS SATISFACTION OF THE AO CANNOT BE OUTSOURCED OR ARRIVED AT ON THE BASIS OF DIRECTIONS OF HIS SUPERIORS. THE ACT RE QUIRES HIS REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. THUS, THE IMPUGNED NOTICE IS NOT SUSTAINABLE. IN THAT VIEW, THE FIRST CONDITION PRECEDENT O F REASON TO BELIEVE IS THAT INCOME CHARGEABLE TO TAX IS ESCAPED ASSESSMENT BEING THE PRIMARY REQUIREMENT IS NOT SATISFIED, THE NOTICE FOR REOPENING IS WITHOUT JURISDICT ION. 7. MR. MALHOTRA, LEARNED COUNSEL FOR THE REVENUE, SUPPORT S THE APPEAL BY STATING THAT ONCE AN AUDIT OBJECTION HAD BEEN RAISED, THEN THE AO IS OBLIGED TO TAKE REMEDIAL ACTION, AS IN THIS CASE, BY ISSUING A REOPENING NOTICE. T HIS FOR THE REASON HE STATES THAT OTHERWISE THE REVENUE DUE TO 11 SHRI SUNIL GAVASKAR THE STATE WOULD BE LOST EVEN IN CASE THE AUDIT OBJECTION I S UPHELD. 8. WE ARE UNABLE TO UNDERSTAND HOW THE MANDATE OF THE ACT REQUIRING THE AO TO HAVE REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT CAN BE IGNORED ON THE ALTAR OF REVENUE COLLECTION. IF SUCH A SUBMISSION IS TO BE ACCEPTED, IT WOULD, BE THE BEGINNING OF THE END O F THE RULE OF LAW. THE AFORESAID JUDGMENT IS SQUARELY APPLICABLE UPON THE FA CTS OF THIS CASE BEFORE US. THUS, WE FIND THAT THE REASONS RECORDED BY THE AO WERE NOT IN ACCORDANCE WITH LAW. 10.2. IT IS FURTHER NOTED BY US THAT PARA2 OF THE REASONS DATED 6 TH JUNE 2007, WAS MODIFIED AT THE INSTANCE OF THE DIT AND PARA3 WAS ADDED SUBSEQUENT TO THE APPROVAL FROM D IT, THAT TOO AT THE INSTANCE OF THE DIT. ALLEGATIONS MADE IN B OTH THESE PARAGRAPHS WERE FOUND TO BE FACTUALLY INCORRECT A S NO EFFECT WAS GIVEN IN THE ASSESSMENT ORDER WITH RESPECT T O THESE ISSUES RAISED IN THESE TWO PARAGRAPHS. IT INDICATES THAT FIRSTLY THERE WAS NO INDEPENDENT APPLICATION OF MIND OF THE AO AN D SECONDLY, THE REASONS WERE FACTUALLY INCORRECT, AT LEAST TO THIS EXTENT. UNDER THESE CIRCUMSTANCES, THESE REASONS CANNOT BE HELD TO BE VALID ON LAW AND FACTS. 11. THE THIRD ISSUE RAISED BY THE LEARNED COUNSEL, WHICH IS ALSO QUITE SIGNIFICANT IN LAW, IS THAT THE IMPUGNED REOPENING I S 12 SHRI SUNIL GAVASKAR BARRED BY LIMITATION IN VIEW OF THE FACT THAT REOPENING HAS BEEN DONE AFTER EXPIRY OF FOUR YEARS AND ORIGINAL ASSESSMENT HAVING BEEN DONE UNDER SECTION 143(3), REOPENING COULD NOT HAVE BEEN DONE AS THERE WAS NO FAILURE ON THE PART OF THE A SSESSEE IN DISCLOSURE OF MATERIAL FACTS. 11.1. WE HAVE CAREFULLY EXAMINED THE REQUISITE FACTS R EQUIRED TO ADDRESS THIS ISSUE ALSO. IT IS NOTED THAT ORIGINAL R ETURN IN THIS CASE WAS FILED UNDER SECTION 139(1) ON 30 TH OCTOBER 2001, ALONG WITH COMPUTATION SHEET, BALANCE SHEET AND PROFIT & LOSS ACCOUNT AND TAX AUDIT REPORT UNDER SECTION 44AB. ALL THES E FACTS ARE BONE OUT AND EVIDENT FROM THE ORIGINAL ASSESSMENT OR DER PASSED UNDER SECTION 143(3) DATED 25 TH AUGUST 2003. DETAILED VERIFICATION WAS DONE DURING THE COURSE OF ASSESSMENT PROCEEDINGS, BEFORE PASSING THE ORDER UNDER SECTION 143 (3). RELEVANT PARA FROM THE ASSESSMENT ORDER UNDER SECTION 143 (3) DATED 25 TH AUGUST, 2003 IS REPRODUCED HEREUNDER FOR THE SAKE OF READY REFERENCE: RETURN DECLARING TOTAL INCOME OF RS 12065650 WAS FILED ON 30.10.2001 ALONG WITH COPIES OF BALANCE SHEET AND P&L ACCOUNT AND TAX AUDIT REPORT U/S. 44AB. THE RETURN WAS PROCESSED U/S. 143(1) AT THE RETURNED INCOME. NOTICE U/S. 143(2) WAS ISSUED ON 01.10.2002 IN RESPONSE TO WHICH SHRI. DILIP V. LAKHANI - C.A. ATTENDED FROM TIME TO TIME AND NECESSARY DETAILS CALLED FOR WERE FILED AND PLACED ON RECORD. 2. THE ASSESSEE IS A WELL KNOWN ERSTWHILE CRICKETER AND WHO HAS ALSO BEEN CONFERRED THE RASHTRIYA SANMAN BY THE C.B.D.T ON 7TH APRIL, 13 SHRI SUNIL GAVASKAR 2000, FOR BEING THE HIGHEST TAXPAYERS DURING THE PERIOD AY 1994-95 TO 1998-99. THE ASSESSEE'S IS DERIVING HIS INCOME BY WAY OF REMUNERATION AND INTEREST FROM THE PARTNER FIRM M/S. PMG EXPORTS IN THE CAPACITY AS A PARTNER. SALARY AND RENT FROM M/S ALL ST AR MANAGEMENT GROUP. THE ASSESSEE HAS ALSO RECEIVED FOREIGN REMITTANCE FROM ESPN STAR SPORTS LTD. FOR GIVING COMMENTARY . (EMPHASIS SUPPLIED) 11.2. WHILE COMPUTING THE INCOME IN THE ASSESSMENT ORDE R, INCOME FROM BUSINESS WAS COMPUTED BY THE AO UNDER THE HEA D INCOME FROM BUSINESS OR PROFESSION AND DEDUCTION UNDER SECTION 80RR THEREON WAS GRANTED AS WAS CLAIMED BY THE ASSESSEE IN ITS RETURN OF INCOME. A PERUSAL OF THE ASSES SMENT ORDER SHOWS THAT COMPLETE FACTS HAVE BEEN NARRATED IN THE ASSESSMENT ORDER THAT ASSESSEE IS A WELL KNOWN ERSTWHI LE CRICKETER. IT HAS ALSO BEEN MENTIONED THAT ASSESSEE HAS ALSO RECEIVED FOREIGN EXCHANGE REMITTANCE FROM ESPN STAR S PORTS LTD. FOR GIVING COMMENTARY. FURTHER, PERUSAL OF THE CO MPUTATION SHEET ENCLOSED WITH THE RETURN SHOWN THAT COMPLETE FACTS HAV E BEEN NARRATED IN THE COMPUTATION SHEET WHEREIN INCOME HAS BEEN SHOWN UNDER THE HEAD INCOME TAX FROM BUSINESS AND DEDUCTION UNDER SECTION 80RR HAS BEEN CLAIMED @ 60% OF FACTUAL INCOME DESCRIBING THE SAME AS PROFESSIONAL INC OME FROM FOREIGN SOURCES. IT IS FURTHER NOTED THAT ASSESSEE HAD FILED REPLIES TO THE AO WHEREIN VARIOUS RELEVANT FACTS HAVE B EEN MENTIONED. SOME OF THE RELEVANT POINTS MENTIONED IN THE REPL Y DATED 22 ND AUGUST, 2003 ARE REPRODUCED BELOW: 14 SHRI SUNIL GAVASKAR OUR CLIENT MR. SUNIL GAVASKAR HAS FILED THE RETURN OF INCOME DECLARING THE TOTAL INCOME AT ` 1,20,65,654. OUR CLIENT HAS EARNED THE INCOME FROM SALARY OF ` 6,00,000. THE SALARY CERTIFICATE IS ENCLOSED ALONG WI TH THE RETURN OF INCOME. THE SALARY IS RECEIVED FROM M/S. ALL STAR MANAGEMENT GROUP PVT. LTD. .. 8. OUR CLIENT HAS RECEIVED COLUMN WRITING FEES FROM ALL STAR MANAGEMENT GROUP PVT. LTD. FOR WRITING COLUMN ON SPORTS ISSUES. 9. OUR CLIENT HAS RECEIVED PROFESSIONAL FEES FROM ESPN SOFTWARE INDIA LTD., AMOUNTING TO RS 9,53,310, TDS CERTIFICATE RECEIVED FROM COMPANY IS ENCLOSED ALONG WITH RETURN OF INCOME. 10. OUR CLIENT HAS RECEIVED FOREIGN REMITTANCE FROM ESPN STAR SPORTS LTD., FOR GIVING COMMENTARY. THE AMOUNT IS RECEIVED IN CONVERTIBLE FOREIGN EXCHANGE AND OUR CLIENT HAS CLAIMED DEDUCTION UNDER SECTION 80RR AT 60% OF THE INCOME RECEIVED IN CONVERTIBLE FOREIGN EXCHANGE. THE CERTIFICATE IN FORM 10H IS ENCLOSED ALONG WITH THE RETURN OF INCOME IN SUPPORT OF THE PROOF THAT AMOUNT IS RECEIVED IN CONVERTIBLE FOREIGN EXCHANGE. 11.3. IT HAS ALSO BEEN MENTIONED IN THE SAID REPLY THAT ASSESSEE WAS CONFERRED SANMAN CERTIFICATE AS ONE OF THE TOP TAX PAYER AND COPY OF SANMAN CERTIFICATE WAS ENCLOSED W ITH THE REPLY. IT WAS ALSO MENTIONED THAT ASSESSEE WAS PREPAR ED TO GIVE FURTHER DETAILS AND EVIDENCES IN SUPPORT OF INCOME AND EXPENDITURE CLAIMED IN THE RETURN OF INCOME. PERUSAL OF T HE INCOME AND EXPENDITURE A/C AGAIN REVEALS THAT COMPLETE I TEM WISE BREAKUP OF THE INCOME RECEIVED BY THE ASSESSEE FROM 15 SHRI SUNIL GAVASKAR VARIOUS SOURCES HAS BEEN GIVEN. THESE AVENUES OF INCOM E INCLUDE COLUMN WRITING AND COMMENTARY, FOREIGN REMITTANCES AND HONORARIUMS AND ROYALTY ON BOOKS. WE FIND THAT AS FAR AS DISCLOSURES ARE CONCERNED, THE ASSESSEE HAD PROVIDED RE QUISITE INFORMATION AND DETAILS IN HIS RETURN OF INCOME AND ALS O FURNISHED FURTHER DETAILS AND EVIDENCES DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS. IT IS NOT AT ALL A CAS E OF FAILURE ON THE PART OF THE ASSESSEE IN DISCLOSURE OF MATERIAL F ACTS. IF AT ALL THERE WAS ANY FAILURE, IT WOULD BE ON THE PART OF THE AO IN NOT APPRECIATING THE FACTS AND APPLICABLE LEGAL POSITIO N, IN THE MANNER AS THE AO AND HIS DIT WANT NOW AT THE REASSESSMENT STAGE. THE LAW IN THIS REGARD IS VERY CLEAR. THE AO C ANNOT BE GIVEN BENEFIT OF ITS OWN WRONG, AND PARTICULARLY IN THOS E CASES WHICH ARE COVERED BY THE FIRST PROVISO TO SECTION 147 . THE POSITION OF LAW IN THIS REGARD IS WELL SETTLED ON THE BASIS OF UMPTEEN NUMBERS OF JUDGMENTS FROM HON'BLE JURISDICTIONAL HIGH COURT AND VARIOUS OTHER COURTS OF THE COUNTRY. FOR READY REFERENCE, WE SHALL RELY UPON A JUDGMENT OF HONBLE BOMB AY HIGH COURT IN THE CASE OF HINDUSTAN PETROLEUM CORPORATION LTD. V. DCIT 328 ITR 534 (BOM) AND MAPS ENZYMS LTD. V. DCI T 41 TAXMANN.COM 527 (GUJ) WHEREIN IT WAS HELD THAT IF THE ASSESSEE HAD MADE DISCLOSURE OF ALL MATERIAL FACTS RE LATING TO ITS CLAIM FOR THE DEDUCTIONS IN THE RETURN WHICH WERE ALLOW ED BY THE AO, DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDI NGS, THEN, REOPENING U/S 147 SOUGHT TO BE DONE BEYOND THE PE RIOD OF 4 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEA R, ON THE 16 SHRI SUNIL GAVASKAR GROUND THAT THE ASSESSEE HAD WRONGLY BEEN ALLOWED DEDUCTION WAS NOT PERMITTED UNDER THE LAW AND BARRED BY LIMITATI ON, IN VIEW OF FIRST PROVISO TO SECTION 147 OF THE ACT. THUS , IN VIEW OF THE ABOVE DISCUSSION, WE FIND IMPUGNED REOPENING TO BE BA RRED BY LIMITATION IN TERMS OF FIRST PROVISO TO SECTION 147 . 11.4. THE FOURTH ARGUMENT OF LD. COUNSEL WAS THAT IN THIS CASE IMPUGNED CLAIM WAS ALLOWED ON THE BASIS OF INFORMATION AND DOCUMENTS PROVIDED IN RETURN AS WELL AS ORIGINAL ASSESSM ENT PROCEEDINGS COMPLETED U/S 143(3), AND THUS AOS ATTEMP T OF REOPENING THIS CASE ON THE SAME SET OF FACTS AND FACTU AL MATERIAL IS BASED UPON CHANGE OF HIS OPINION AND HAS AMOUNT ED TO REVIEW OF THE ORIGINAL ASSESSMENT ORDER. ON THE OT HER HAND, LD DR SUBMITTED THAT NO OPINION WAS FORMED BY THE AO A S NO DISCUSSION WAS MADE BY HIM ON THIS ISSUE IN THE ORIGINAL ASSESSMENT ORDER. 11.5. WE HAVE CONSIDERED ARGUMENTS OF BOTH SIDES. IT IS NOTED THAT A GENERAL PRACTICE WHICH IS UNIFORMLY FOLLOWED IN TH E INCOME TAX DEPARTMENT BY THE ASSESSING OFFICERS IS THA T THE ASSESSMENT ORDERS ARE DRAFTED IN A MANNER THAT THESE ARE NEGATIVELY WORDED I.E. THESE CONTAIN ONLY ADVERSE OBSER VATIONS AGAINST THE CLAIMS MADE BY THE ASSESSEE IN THE RETURN OF INCOME, AND NO POSITIVE FINDINGS ARE DISCUSSED THEREIN. FOR THE SAKE OF BREVITY AND FEASIBILITY, ONLY THOSE ISSUES ARE DISCUSSED IN THE ORDER, ON WHICH SOME DISALLOWANCE/ADDITIONS ARE MADE IN 17 SHRI SUNIL GAVASKAR THE ORDER. THUS, TO DECIDE WHETHER THE AO HAD ACTUALLY AP PLIED MIND UPON AN ISSUE FOR WHICH NO ADDITION/DISALLOWANCE WAS MADE IN THE ASSESSMENT ORDER, WE MAY BE REQUIRED TO EX AMINE AND GO THROUGH ENTIRE RELEVANT MATERIAL HELD ON ASSESSMENT RECORD OF THE AO. IF, DURING THE COURSE OF ORIGINAL ASSE SSMENT PROCEEDINGS, PERTINENT QUERIES WERE RAISED BY THE AO AND THEIR REPLIES WERE GIVEN BY THE ASSESSEE OR IF REQUISITE FA CTS AND CONNECTED MATERIAL IS HELD ON RECORD OF THE AO WHICH WE RE RELEVANT TO DECIDE AN ISSUE, THEN UNDER THESE CIRCUMSTANCES, A NATURAL INFERENCE CAN BE DRAWN THAT THE AO HAD APPLIED HIS MIND BEFORE FRAMING THE ASSESSMENT ORDER WHILE DECIDING THAT ISSUE IN FAVOUR OF THE ASSESSEE, AND AN OPINION WAS FORMED BY HIM IN FAVOUR OF THE ASSESSEE. 11.6. WITH THE ASSISTANCE OF BOTH THE PARTIES, WE HAVE GO NE THROUGH THE REASONS RECORDED. WE HAVE ALREADY DISCUSSED IN DETAIL IN EARLIER PART OF OUR ORDER THAT COMPLETE FA CTS WITH REGARD TO WORK PROFILE AND STATUS OF THE ASSESSEE, NAT URE OF RECEIPT AND PARTICULARS OF DEDUCTIONS CLAIMED IN THE RE TURN WERE PROVIDED ALONG WITH RETURN AND FURTHER SUPPORTED BY FURTHER INFORMATION AND DOCUMENTS SUBMITTED DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS. THE AO HAD EXAMINED THES E DOCUMENTS AND HE WAS AWARE OF COMPLETE FACTS, AND THUS, APPARENTLY, AN OPINION WAS FORMED BY THE AO WHILE GRANTI NG THE BENEFIT OF DEDUCTION U/S 80RR. 18 SHRI SUNIL GAVASKAR 11.7. SUBSEQUENTLY, AT THE STAGE OF REOPENING, THE AO HAS ALLEGED IN THE REASONS RECORDED THAT THE DEDUCTION WAS WRONGLY GRANTED. IN OUR OPINION, IT IS CLEARLY A CASE OF CHANGE OF OPINION BY THE AO. THE LAW IN THIS REGARD IS ALSO WELL SETTLED, I.E., THE REOPENING OF AN ASSESSMENT CANNOT BE DONE ON THE BASIS OF CHANGE OF OPINION BY THE AO. THIS ISSUE HAS BEEN SETTLED BY HONBLE SUPREME COURT IN THE CASE OF KELVINAT OR OF INDIA LTD. IN 320 ITR 561 (SC) AND HAS BEEN FOLLOWED REG ULARLY. SUBSEQUENTLY, IN MANY JUDGMENTS INCLUDING VARIOUS JUDGMENTS FROM HONBLE BOMBAY HIGH COURT ALSO, E.G. IN THE CASE OF DIRECT INFORMATION PVT. LTD. VS. ITO 349 ITR 150 (BOM), A SI MILAR VIEW HAS BEEN TAKEN BY THE JURISDICTIONAL HIGH COURT. WE SHALL AL SO LIKE TO RELY UPON A VERY RECENT JUDGMENT FROM HONBLE B OMBAY HIGH COURT IN THE CASE OF NIRMAL BANG SECURITIES PVT. LT D. V/S ACIT, W.P. NO. 2665/2007, ORDER DATED 18 TH JANUARY, 2016, IN SUPPORT OF OUR VIEW, WHEREIN IT WAS HELD THAT WHEN THE ASSESSMENT ORDER WAS PASSED BY THE AO AFTER DUE APPLI CATION OF MIND, AFTER CONSIDERING THAT DIVIDEND INCOME EARNED FR OM THE MUTUAL FUNDS ARE EXEMPT FROM TAX U/S 10(33), SUBSEQUE NT INITIATION OF REASSESSMENT PROCEEDINGS WOULD BE CONSID ERED MERELY ON THE BASIS OF A CHANGE OF OPINION. 12. BEFORE WE CONCLUDE AND WIND UP THE ISSUE OF REOPENING, WE FIND IT APPROPRIATE TO REFER AND DISCUSS HERE THAT THE GOVERNMENT OF INDIA HAD CONSTITUTED INCOME-TAX SIMPLIFICA TION COMMITTEE UNDER THE CHAIRMANSHIP OF JUSTICE R.V. EASWAR, 19 SHRI SUNIL GAVASKAR FORMER JUDGE, DELHI HIGH COURT. RECENTLY, THE COMMITTEE HAS SUBMITTED ITS FIRST REPORT CONTAINING FIRST BATCH OF RECOMMENDATIONS TO BE PUT UP IN PUBLIC DOMAIN. THE COMMITTEE SERIOUSLY CONSIDERED THE PROBLEMS FACED BY T HE TAXPAYERS BECAUSE OF REOPENING OF THE ASSESSMENT IN VA RIOUS UNDESERVING CASES. THUS, SOME SUGGESTIONS HAVE BEEN GIVEN BY THE COMMITTEE WHICH WE FIND RELEVANT FOR DECIDING THE ISS UE OF REOPENING IN THE GIVEN FACTS OF THE CASE BEFORE US, I.E. WHERE THE REOPENING IS DONE INFLUENCED BY THE AUDIT OBJECTIONS. TH E RELEVANT PART OF THE SUGGESTION GIVEN BY THE COMMITTEE IS REPRODUCED HEREUNDER FOR THE SAKE OF READY REFERENCE: RE-OPENING OF ASSESSMENT ON ACCOUNT OF AUDIT OBJECTIONS: ONE OF THE KEY SOURCES OF DISPUTE IS THE EXISTING ARRANGEMENT FOR FOLLOW UP ON AUDIT OBJECTIONS BY INTERNAL AUDIT PARTY AND THE REVENUE AUDIT PARTY. IN TERMS OF THE EXISTING ARRANGEMENT, THE AO IS REQUIRED TO TAKE CORRECTIVE STEPS FOLLOWING AUDIT OBJECTIONS. THE CORRECTIVE MEASURES TAKE THE FORM OF RECTIFICATION OR REASSESSMENT (BY REOPENING THE CASE UNDER SECTION 147 OR REVISION BY THE PRINCIPAL COMMISSIONER OR COMMISSIONER UNDER SECTION 263). IN THE CASE OF RECTIFICATION, THESE ARE GENERAL IN THE NATURE OF CORRECTION FOR ARITHMETICAL ERRORS AND OTHER MISTAKES WHICH ARE APPARENT FROM THE RECORD. THE PROBLEM ARISES WHEN THE AO SEEKS TO TAKE CORRECTIVE MEASURES BY INVOKING THE PROVISIONS OF SECTION 147 OR 263 OF THE INCOME TAX ACT. SINCE THE AUDIT OBJECTIONS ARE BASED ON MATERIAL ON RECORD AND THERE IS NO OCCASION FOR NEW MATERIAL TO BE BROUGHT ON RECORD IN THE COURSE 20 SHRI SUNIL GAVASKAR OF AUDIT, ANY REOPENING OF ASSESSMENT OR REVIEW BY THE PRINCIPAL COMMISSIONER CONSTITUTES 'CHANGE OF OPINION' IN THE EYES OF THE LAW. THIS BEING SO, THE CORRECTIVE MEASURE UNDER SECTION 147 OR SECTION 263 OF THE INCOME TAX ACT IS HELD TO BE INVALID BY COURTS. IN INDIAN & EASTERN NEWSPAPER SOCIETY VS CIT (1979) 119 ITR 996 THE SUPREME COURT EXTENSIVELY CONSIDERED THE POWERS AND DUTIES OF BOTH THE INTERNAL AUDIT PARTY OF THE INCOME-TAX DEPARTMENT (PRIOR TO 1960) AND THOSE OF THE C & AG UNDER THE COMPTROLLER & AUDITOR GENERAL'S (DUTIES, POWERS AND CONDITIONS OF SERVICE) ACT, 1971 AND OPINED THAT NEITHER STATUTE RECOGNISES THE POWER ON SUCH AUTHORITIES, TO PRONOUNCE ON THE LAW AND THAT THEIR PRONOUNCEMENTS ON LAW CANNOT AMOUNT TO 'INFORMATION' ON THE BASIS OF WHICH ASSESSMENTS CAN BE REOPENED UNDER SECTION 147. THE SAME PRINCIPLE IN OUR OPINION SHOULD HOLD GOOD FOR SECTION 263. IT IS ALSO NOTICED THAT OFTEN THE INCOME-TAX AUTHORITIES ARE NOT IN A POSITION TO OVERLOOK THE AUDIT OBJECTION ON A POINT OF LAW THOUGH THEY HAVE TAKEN A VIEW AFTER DUE APPLICATION OF MIND TO THE LEGAL POSITION, DUE TO SEVERAL REASONS. THIS HAS LED TO AVOIDABLE LITIGATI ON, EVEN THOUGH THE RULING OF THE SUPREME COURT IS CLEAR AND CATEGORICAL. MOREOVER, THE MINISTRY OF LAW BY ITS ADVICE DATED 24TH JUNE, 1982 TO THE MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) HAS OPINED, AFTER REFERRING TO THE RULING OF THE SUPREME COURT, THAT THE ' .......AUDIT OBJECTION AS WELL AS THE NOTE OF THE MINISTRY OF LAW CANNOT BE THE BASIS FOR THE RE-OPENING OF THE ASSESSMENTS MADE UNDER SECTION 59 OF THE ESTATE DUTY ACT. THEREFORE, THE INSTRUCTIONS REFERRED TO BY THE DEPARTMENT IN PARA (A) OF THEIR NOTE BASED ON THE AUDIT OBJECTION 21 SHRI SUNIL GAVASKAR DIRECTING THE REOPENING OF THE ASSESSMENTS ALREADY CONCLUDED RUNS COUNTER TO THE DECISION OF THE SUPREME COURT REFERRED TO ABOVE (SOURCE: PAGE NO. 9961 OF VOLUME 6, 11TH EDN. LAW OF INCOME TAX B Y SAMPATH IYENGAR) IN SPITE OF SEVERAL COURT JUDGMENTS TO THIS EFFECT, THE CBDT HAS ISSUED A CIRCULAR TO THE EFFECT THAT I N ALL CASES OF AUDIT OBJECTIONS, THE AO SHOULD INITIA TE CORRECTIVE STEPS IRRESPECTIVE OF WHETHER THE OBJECTION IS VALID OR NOT IN THE EYE OF LAW. CONSEQUENTLY, STEPS ARE INITIATED BY THE AO TO REOPEN THE COMPLETED ASSESSMENT OR BY THE PRINCIPAL COMMISSIONER FOR REVISION OF ASSESSMENT ORDERS. THESE STEPS GIVE RISE TO SEVERAL ROUNDS OF LITIGATION; FIRST THE ASSESSEE CHALLENGES THE VERY ACT OF REOPENING OR REVISION, AS THE CASE MAY BE, AND UPON LOSING, THE DEPARTMENT FILES APPEAL BEFORE THE HIGHER COURTS THEREBY CLOGGING THE JUDICIAL SYSTEM. WHILE THIS PROCESS IS ON, THE AO PROCEEDS TO COMPLETE THE ASSESSMENT ON MERIT LEADING TO ANOTHER ROUND OF LITIGATION. IN LARGE NUMBER OF CASES, THE ASSESSMENTS ON MERIT ARE COMPLETED EVEN THOUGH THE DEPARTMENT IS IN DISAGREEMENT WITH THE AUDIT OBJECTION. THIS COMMITTEE WAS INFORMED THAT MORE THAN 25% OF THE LITIGATION IN THE DEPARTMENT IS ON ACCOUNT OF MANDATORY CORRECTIVE MEASURES INITIATED FOLLOWING AUDIT OBJECTIONS. IN VIEW OF THE ABOVE, IT IS RECOMMENDED THAT TO THE EXTENT THE AUDIT OBJECTIONS ARE MISTAKES APPARENT FROM RECORD, IT SHOULD BE MANDATORY FOR THE AO TO TAKE CORRECTIVE STEPS. HOWEVER, WHERE THE CORRECTION OF THE AUDIT OBJECTIONS REQUIRE RE-OPENING OR REVISION OF COMPLETED ASSESSMENTS, THE SAME SHOULD NOT BE PERMITTED SINCE IT AMOUNTS TO CHANGE OF OPINION AND CREATES UNCERTAINTY FOR THE TAXPAYER. SUCH AUDIT OBJECTIONS MAY BE USED 22 SHRI SUNIL GAVASKAR AS MATERIAL FOR KNOWLEDGE DISSEMINATION AND SYSTEM IMPROVEMENT. IN OTHER WORDS, SUCH AUDIT OBJECTIONS MAY BE GIVEN PROSPECTIVE EFFECT BY AMENDING THE LAW OR ISSUING CIRCULAR, AS THE CASE MAY BE, TO REMOVE AMBIGUITY AND ELIMINATE ALL SCOPE FOR LITIGATION. 12.1. THUS, FROM THE ABOVE, IT IS CLEAR THAT THE COM MITTEE, AFTER CONSIDERING ENTIRE GAMUT OF CIRCUMSTANCES FACED B Y THE REVENUE AS WELL AS ASSESSEES, SUGGESTED THAT REOPENING , MERELY ON THE BASIS OF AUDIT OBJECTIONS AND IN ABSENCE OF ANY NEW MATERIAL INDICATING ESCAPEMENT OF INCOME, AMOUNTS TO CHANGE OF OPINION AND CREATES UNCERTAINTIES FOR TAXPAYERS. THUS, OUR VIEW IS IN LINE WITH IDEAL POSITION OF LAW AS E NVISAGED BY A COMPETENT BODY. 13. THE FIFTH ARGUMENT OF THE LD. COUNSEL IS FOR ASSAILING THE REASONS ON ITS MERITS. IT HAS BEEN ARGUED THAT ON THE FA CTS OF THE CASE AND LAW APPLICABLE, NO PRIMA FACIE BELIEF COULD HAVE BEEN FORMED ABOUT ESCAPEMENT OF INCOME IN THE HANDS OF THE ASSESSEE. 14. THE SIXTH AND LAST ARGUMENT OF THE ASSESSEE WAS THAT DISALLOWANCE WAS INCORRECT AS PER LAW AND FACTS ON MERI TS ALSO. WE SHALL DEAL WITH BOTH OF THESE ARGUMENTS TOGETHER, AS T HESE ARE INTERCONNECTED WITH EACH OTHER. 23 SHRI SUNIL GAVASKAR 14.1. IT HAS BEEN SUBMITTED THAT EVEN, IF MORE COMPREHENSIVE REASONS I.E. REASONS DATED 06.06.2007 ARE TAKEN I NTO CONSIDERATION, IT CAN BE SEEN THAT ALL THE THREE ALLEGATI ONS MADE IN THE REASONS ARE FACTUALLY INCORRECT AND LEGALLY I NVALID. WE HAVE GONE THROUGH THE REASONS RECORDED. THE FIRST ALLEG ATION OF THE AO IS WITH REGARD TO WRONG CLAIM OF DEDUCTION U /S 80RR, WHICH WE SHALL DEAL AND DISCUSS IN DETAIL, LITTLE LATER . 14.2. THE SECOND ALLEGATION IS THAT THERE WAS DIFFEREN CE TO THE TUNE OF RS.1,94,362/- IN THE INCOME SHOWN AS PER REMITTA NCE CERTIFICATE FOR RS.1,60,90,500/- WHEREAS, AS PER COM PUTATION OF INCOME THE ASSESSEE HAS SHOW INCOME OF RS.1,62,85,132/ -. THUS, ACCORDING TO AO THERE WAS DIFFERENCE OF RS.1,94,6 32/-. WE HAVE GONE THROUGH THE REQUISITE FACTS OF THIS CASE. IT IS NOTED THAT ALLEGATIONS MADE IN THE REASONS ARE FOUND T O BE NOT ONLY FACTUALLY INCORRECT BUT OF NO IMPLICATION ALSO. IT HAS BEEN ALLEGED IN THE REASONS THAT INCOME SHOWN BY THE ASSESSEE IN ITS COMPUTATION SHEET IS MORE BY A SUM OF RS.1,94,632/- AS COMPARED TO THE AMOUNT OF RECEIPTS SHOWN IN THE REMITTA NCE CERTIFICATE. EVEN, THIS ALLEGATION IS FACTUALLY CORRECT ; IT DOES NOT PROVE ANY ESCAPEMENT OF INCOME. RATHER, IT SHOWS EXCESS ASSESSMENT OF INCOME. EVEN, OTHERWISE NO ADDITION HAS BE EN MADE IN THE ASSESSMENT ORDER ON THIS GROUND AND THIS GRO UND WAS DROPPED BEING FACTUALLY AND LEGALLY INCORRECT. 24 SHRI SUNIL GAVASKAR 14.3. THE THIRD PARA OF THE REASONS STATES THAT THERE WAS SOME CHANGE IN METHOD OF ACCOUNTING BY THE ASSESSEE DURIN G THE YEAR AS COMPARED TO THE PRECEDING YEAR. FROM THE P ERUSAL OF THE ASSESSMENT, IT IS NOTED THAT NO COGNIZANCE HAS BEE N TAKEN BY THE AO EVEN FOR THIS ALLEGATION WHILE COMPUTING INCOME IN THE ASSESSMENT ORDER BY THE AO. IT IS, THUS, APP ARENT THAT EVEN THIS ALLEGATION WAS WITHOUT ANY SUBSTANCE AND REAL IMPLICATION UPON THE ASSESSMENT OF INCOME OF THE ASSESS EE. 15. NOW, WE ARE LEFT WITH THE ASSERTION MADE IN THE FIR ST PARA OF THE REASONS ABOUT ALLEGED WRONG CLAIM OF THE ASSESSEE FOR CLAIMING DEDUCTION U/S 80RR OF RS.97,71,079/- BEING 60% OF THE PROFESSIONAL INCOME FROM FOREIGN SOURCES AMOUNTING TO RS.1,62,85,132/-. IT HAS BEEN STATED IN THE REASONS THA T DEDUCTION U/S 80RR IS ALLOWABLE IN RESPECT OF PROFESSI ONAL INCOME FROM FOREIGN SOURCES WHERE THE TOTAL INCOME OF AN INDIVIDUAL BEING INTER-ALIA SPORTSMAN, INCLUDES AN INCOME DERIVED BY HIM IN THE EXERCISE OF HIS PROFESSION FROM ANY PERSON NOT RESIDENT IN INDIA, BUT, IN THIS CASE THE ASSESSE E WAS NEITHER A SPORTSMAN NOR AN ATHLETE. ACCORDING TO AO, THE ASSESSEE DID NOT EXERCISE ANY OF THE PROFESSIONS COVE RED IN DEFINITION OF SECTION 80RR, AND THUS THE ASSESSEE HAD WRO NGLY CLAIM DEDUCTION U/S 80RR. 15.1. WE HAVE EXAMINED ENTIRE GAMUT OF FACTS OF THIS CAS E AND JUDGMENTS PLACED BEFORE US ON THIS ISSUE BY BOTH THE SIDES . 25 SHRI SUNIL GAVASKAR ADMITTED FACTS ON RECORD, WHICH ARE IN PUBLIC DOMAIN A LSO, ARE THAT THE ASSESSEE HAS BEEN A CRICKETER OF INTERNATIONAL ST ATURE AND HAS BEEN ALWAYS PLAYING FOR THE COUNTRY IN DOMESTIC AS WELL AS INTERNATIONAL CRICKET TOURNAMENTS. THE PERUSAL OF THE I NCOME TAX EXPENDITURE ACCOUNT OF THE ASSESSEE FOR THE YEAR UND ER CONSIDERATION REVEALS THAT THE ASSESSEE HAS RECEIVED INCO ME INTER ALIA FROM FOLLOWING SOURCES: (I) COLUMN WRITING AND COMMENTARY (II) ROYALTY ON BOOKS (III) HONORARIUM (IV) FOREIGN REMITTANCES (RECEIVED FROM M/S. ESPN STAR SPORTS LTD., SINGAPORE. 15.2. THE ASSESSEE HAD RECEIVED INCOME IN THE FORM OF F OREIGN REMITTANCES, ON WHICH DEDUCTION WAS CLAIMED U/S 80RR, IN PURSUANCE TO AN AGREEMENT, DATED 10 TH MAY, 1999 WITH M/S ESPN STAR SPORTS FOR RENDERING SERVICES ON AN EXCLUSIVE BASIS AS A PRESENTER, REPORTER AND COMMENTATOR AND VARIOUS OTHER ALLIED SERVICES DESCRIBED IN THE SAID AGREEMENT. LD. CIT(A) EXAMINED AND DISCUSSED ABOUT CLAUSE 2(A) OF THE AGREEM ENT, BUT AFTER DISCUSSING ABOUT THE SAME, CLAIM OF THE ASSESSE E WAS REJECTED ON THE GROUND THAT THIS DEDUCTION IS AVAILABLE TO A PERSON WHO IS SPORTSMAN OR A PERSON BELONGING TO ANY ONE OF THE CATEGORIES AS MENTIONED IN THE SAID SECTION AND THE INCOME MUST BE DERIVED AS A RESULT OF CARRYING OUT THAT VERY ACTIVITY ONLY. BUT IN THE CASE OF ASSESSEE, SINCE ASSESSEE WAS NO MORE A SPORTSMAN OR A CRICKETER AND IN ANY CASE SINCE THE IMPUGNE D 26 SHRI SUNIL GAVASKAR INCOME WAS NOT EARNED AS A RESULT OF PLAYING CRICKET, A ND THEREFORE, IN VIEW OF REQUIREMENT OF SECTION 80RR, THE ASSESSEE WAS NOT ELIGIBLE TO CLAIM THE DEDUCTION U/S 80RR. WE HA VE CAREFULLY CONSIDERED THE CONTENTION OF THE REVENUE, BUT DO NOT AGREE WITH THE CONTENTIONS RAISED BEFORE US FOR DENYING T HE BENEFIT OF SECTION 80RR TO THE ASSESSEE BY THE AO, LD. CIT(A) OR EVEN LD. DR, FOR VARIOUS REASONS AS ARE DISCUSSED I N FOLLOWING PARAGRAPHS. 15.3. IN THIS REGARD, BEFORE INTERPRETING THE PROVISIONS OF SECTION 80RR, WE SHALL LIKE TO DISCUSS A LITTLE BACKGR OUND AS TO WHY THIS PROVISION WAS BROUGHT ON THE STATUTE, AND FOR THIS PURPOSE WE NEED NOT GO TOO FAR AS THE OBJECT OF THIS SEC TION WAS AGAIN CLARIFIED BY CENTRAL BOARD OF DIRECT TAXES VIDE ITS CIRCULAR NO.281 DATED 22 ND SEPTEMBER, 1980 WHILE EXPLAINING RATIONALE OF THE AMENDMENT MADE IN SECTION 80RR BY FINANC E ACT, 1980 FOR INCLUDING FEW MORE CATEGORIES OF PERSONS ELIGIBLE TO CLAIM BENEFIT OF DEDUCTION U/S 80RR. THE RELEVANT P ARA OF THIS CIRCULAR IS REPRODUCED HEREUNDER: 23.1: EXTENSION OF THE BENEFIT OF DEDUCTION IN RESPECT OF PROFESSIONAL INCOME FOR FOREIGN SOURCES TO SPORTSMEN AND ATHLETES- SECTION 80RR- UNDER SECTION 80RR, A RESIDENT INDIVIDUAL BEING AN AUTHOR, PLAYWRIGHT, ARTIST, MUSICIAN OR ACTOR, WHO DERIVES INCOM E IN THE EXERCISE OF HIS PROFESSION FROM FOREIGN SOURCES AND RECEIVES SUCH INCOME IN INDIA OR BEINGS IT INTO INDIA IN FOREIGN EXCHANGE, IT ENTITLED TO DEDUCT 25 PER CENT OF T HE INCOME SO RECEIVED OR BROUGHT INTO INDIA IN COMPUTING HIS TOTAL INCOME. THIS PROVISION IS DESIGNED TO ENCOURAGE AUTHORS, PLAYWRIGHTS, ARTISTS, MUSICIANS AND ACTORS IN OUR 27 SHRI SUNIL GAVASKAR COUNTRY TO PROJECT THEIR ACTIVITIES OUTSIDE INDIA WITH A VIEW TO CONTRIBUTING TO GREATER UNDERSTANDING OF OUR COUNTRY AND ITS CULTURE ABROAD AND ALSO FOR AUGMENTING OUR FOREIGN EXCHANGE RESOURCES. WITH A VIEW TO ENCOURAGING OUR SPORTSMEN AND ATHLETES TO COMPETE IN INTERNATIONAL EVENTS , THE FINANCE ACT HAS AMENDED SECTION 80RR TO INCLUDE THEM IN THE CATEGORY OF PERSONS ENTITLED TO THE BENEFIT OF THAT SECTION. 15.4. THE PERUSAL OF THE ABOVE SAID CIRCULAR CLEARLY SHOWS THAT SECTION 80RR IS A BENEFICIAL PROVISION INTENDED TO PROVI DE BENEFITS OF TAX CONCESSIONS TO THOSE PERSONS WHO CAN CONTR IBUTE TO GREATER UNDERSTANDING OF OUR COUNTRY AND ITS CULTURE ABR OAD AND ALSO FOR AUGMENTING OUR FOREIGN EXCHANGE RESOURCES. THE CIRCULAR CLEARLY LAYS DOWN THAT AIM OF SECTION 80RR IS TO ENCOURAGE OUR SPORTSMAN, AND ATHLETES AND PERSONS OF OTHER CATEGORIES AS MENTIONED IN THE SECTION 80RR. 15.5. IN THE BACKDROP OF AFORESAID OBJECT OF THIS SEC TION, IT CAN BE CLEARLY SAID THAT OBJECT OF THE LAW WAS TO INCENTIVIZ E AND ENCOURAGE PERSONS IN THE FIELD OF SPORTS, AUTHOR, ARTISTS, AND OTHER CATEGORIES AS MENTIONED THEREIN. IT IS WELL SET TLED LAW THAT BENEFICIAL PROVISIONS OF THE LAW MUST BE CONSTRUED LIBER ALLY. WHILE INTERPRETING A BENEFICIAL LEGISLATION, RULE OF LI BERAL CONSTRUCTION SHOULD BE PREFERRED OVER THE RULE OF STRICT INTERPRETATION, AND THEREFORE AN EFFORT MUST BE MADE TO SEE HOW THE BENEFIT CAN BE PROVIDED TO THE PERSONS WHO ARE CLAIMING IT SINCERELY AND GENUINELY. THE INTERPRETATION T HAT ENABLES US TO ACHIEVE ITS OBJECT SHOULD BE PREFERRED OV ER THE ONE THAT TEND TO FRUSTRATE IT, AND THE ONE WHICH TAKES US I N A 28 SHRI SUNIL GAVASKAR DIRECTION TO FIND OUT HOW THE BENEFIT CAN BE DENIED. THUS, FOR APPRECIATING THE TRUE MEANING OF THE TERMS USED IN THE SEC TION, AN EXPRESSION OF WIDER AMPLITUDE MAY BE PREFERRED IN COMPARISON TO A NARROWER ONE WHILE DEFINING SCOPE AND BOUNDARIES OF THE BENEFITS INTENDED TO BE PROVIDED BY TH E LEGISLATURE. ANY TYPE OF NARROW MINDED APPROACH OR MYOPI C VIEW WHILE EXAMINING THE ELIGIBILITY OF DEDUCTION MAY CAUSE UNDUE HARDSHIP TO ELIGIBLE PERSONS AND MAY FRUSTRATE THE O BJECT OF LEGISLATION. PURPOSIVE CONSTRUCTION IS A WELL ACC EPTED RULE OF INTERPRETATION WHICH SAYS THAT THE COURTS MUST LOOK UPON TH E OBJECT WHICH THE STATUTE SEEKS TO ACHIEVE, ESPECIALL Y WHILE INTERPRETING ANY BENEFICIAL LEGISLATION. IF THERE IS AN A MBIGUITY, A PURPOSIVE APPROACH FOR INTERPRETING THE ACT IS NECESSAR Y. IF TWO VIEWS ARE POSSIBLE, ONE EFFECTUATES THE PURPOSE OR INTENDMENT OF THE PROVISION AND THE OTHER FRUSTRATES IT, THE FORMER MUST BE PREFERRED. EVERY EFFORT SHOULD BE MADE TO MAKE A PURPOSIVE CONSTRUCTION WITH A VIEW TO EFFECTUATE THE PUR POSE AND OBJECT OF THE STATUTORY PROVISION. 15.6. IN THE CASE OF SMT. SAROJ AGGARWAL VS. CIT 156 ITR 497 (SC), HONBLE SUPREME COURT HAS SET OUT CERTAIN TES TS FOR INTERPRETATION OF STATUTES. IT WAS OBSERVED THAT F ACTS SHOULD BE VIEWED IN NATURAL PERSPECTIVE, HAVING REGARD TO THE COMPULSION OF THE CIRCUMSTANCES OF A CASE. WHERE IT IS POSSIBLE T O DRAW TWO INFERENCES FROM THE FACTS AND WHERE THERE IS NO EVI DENCE OF ANY DISHONEST OR IMPROPER MOTIVE ON THE PART OF THE ASS ESSEE, IT WOULD BE JUST AND EQUITABLE TO DRAW SUCH INFERENCE IN SUCH A 29 SHRI SUNIL GAVASKAR MANNER THAT WOULD LEAD TO EQUITY AND JUSTICE. TOO H YPER-TECHNICAL OR LEGALISTIC APPROACH SHOULD BE AVOIDED IN LOOKING AT A PROVISION WHICH MUST BE EQUITABLY INTERPRETED AND JUSTLY ADMI NISTERED. COURTS SHOULD, WHENEVER POSSIBLE, UNLESS PREVENTED BY THE EXPRESS LANGUAGE OF ANY SECTION OR COMPELLING CIRCU MSTANCES OF ANY PARTICULAR CASE, MAKE A BENEVOLENT AND JUSTICE- ORIENTED INFERENCE. FACTS MUST BE VIEWED IN THE SOCIAL MILIE U OF A COUNTRY. 15.7. FURTHER, THE APEX COURT IN THE CASE OF CIT VS. GWALIOR RAYON SILK MANUFACTURING CO. LTD. 196 ITR 149 (SC) HAS HE LD WITH REGARD TO THE INTERPRETATION OF STATUTE GRANTING DEDU CTION, EXEMPTION, OR RELIEF TO THE TAXPAYER THAT I T IS SETTLED LAW THAT THE EXPRESSION USED IN THE TAXING STATUTE WOULD ORDINAR ILY BE UNDERSTOOD IN THE SENSE IN WHICH IT IS HARMONIOUS W ITH THE OBJECT OF STATUTE TO EFFECTUATE THE LEGISLATIVE INTENTION. IT IS EQUALLY SETTLED LAW THAT, IF THE LANGUAGE IS PLAIN AND UNAM BIGUOUS, ONE CAN ONLY LOOK FAIRLY AT THE LANGUAGE USED AND INTER PRET IT TO GIVE EFFECT TO THE LEGISLATIVE INTENTION. NEVERTHELESS, TAX LAWS HAVE TO BE INTERPRETED REASONABLY AND IN CONSONANCE WITH JU STICE ADOPTING PURPOSIVE APPROACH. THE CONTEXTUAL MEANING HAS TO B E ASCERTAINED AND GIVEN EFFECT TO. A PROVISION FOR DE DUCTION, EXEMPTION OR RELIEF SHOULD BE CONSTRUED REASONABLY AND IN FAVOUR OF THE ASSESSEE. 15.8. IN THE CASE CIT VS. SULTAN & SONS RICE MILL 272 ITR 181 (ALL), HONBLE ALLAHABAD HIGH COURT OBSERVED THAT IT IS SAID THAT A STATUTE IS BEST UNDERSTOOD IF WE KNOW THE REASON FOR IT. THE REASON FOR A STATUTE IS THE SAFEST GUIDE TO ITS INT ERPRETATION. THE 30 SHRI SUNIL GAVASKAR WORDS OF A STATUTE TAKE THEIR COLOUR FROM THE REASO N FOR IT. NO PROVISION IN THE STATUTE AND NO WORD OF THE STATUTE MAY BE CONSTRUED IN ISOLATION. EVERY PROVISION AND EVERY W ORD MUST BE LOOKED AT GENERALLY BEFORE ANY PROVISION OR WORD IS ATTEMPTED TO BE CONSTRUED. THE SETTING AND PATTERN ARE IMPORTANT . 15.9. HONBLE SUPREME COURT IN THE DECISION REPORTE D IN CIT VS. J.H. GOTLA 156 ITR 323 (SC), HAS OBSERVED THAT IF A STRICT AND LITERAL CONSTRUCTION OF THE STATUTE LEADS TO AN ABS URD RESULT, I.E., A RESULT NOT INTENDED TO BE SUB-SERVED BY THE OBJECT OF THE LEGISLATION ASCERTAINED FROM THE SCHEME OF THE LEGI SLATION THEN IF ANOTHER CONSTRUCTION IS POSSIBLE APART FROM THE STR ICT LITERAL CONSTRUCTION, THEN THAT CONSTRUCTION SHOULD BE PREF ERRED TO THE STRICT LITERAL CONSTRUCTION. WHERE THE PLAIN LITERA L INTERPRETATION OF A STATUTORY PROVISION PRODUCES A MANIFESTLY UNJUST RESULT WHICH COULD NEVER HAVE BEEN INTENDED BY THE LEGISLATURE, THE COURT MIGHT MODIFY THE LANGUAGE USED BY THE LEGISLATURE S O AS TO ACHIEVE THE INTENTION OF THE LEGISLATURE AND PRODUC E A RATIONAL RESULT. WHAT IS EVEN MORE SIGNIFICANT IS THE OBSERV ATION OF THE COURT IN THIS CASE WHEREIN IT WAS OBSERVED THAT THO UGH EQUITY AND TAXATION ARE OFTEN STRANGERS, ATTEMPTS SHOULD BE MA DE THAT THESE DO NOT REMAIN ALWAYS SO AND IF A CONSTRUCTION RESUL TS IN EQUITY RATHER THAN IN INJUSTICE, THEN SUCH CONSTRUCTION SH OULD BE PREFERRED TO THE LITERAL CONSTRUCTION. 15.10. IN AFORESAID LEGAL BACKGROUND, LET US FURTHER ANA LYSE THE PROVISIONS OF SECTION 80RR IN THE LIGHT OF THE FACTS OF THIS CASE. 31 SHRI SUNIL GAVASKAR 16. FOR BETTER APPRECIATION OF LAW AND FACTS, IT IS NECESS ARY TO FIRST ANALYSE THE RELEVANT PROVISIONS OF SECTION 80RR AS THEY STOOD IN THE RELEVANT ASSESSMENT YEAR, WHICH READ AS UNDE R: WHERE THE GROSS TOTAL INCOME OF AN INDIVIDUAL RESIDENT IN INDIA, BEING AN AUTHOR, PLAYWRIGHT, ARTIST [MUSICIAN, ACTO R OR SPORTSMAN (INCLUDING AN ATHLETE)] INCLUDES ANY INCOME DERIVED BY HIM IN THE EXERCISE OF HIS PROFESSION FROM T HE GOVERNMENT OF A FOREIGN STATE OR ANY PERSON NOT RESIDENT I N INDIA, THERE SHALL BE ALLOWED IN COMPUTING THE TOTAL INC OME OF THE INDIVIDUAL, A DEDUCTION FROM SUCH INCOME OF AN AMOUNT EQUAL TO (I) SIXTY PER CENT OF SUCH INCOME OR AN ASSESSMENT YEAR BEGINNING ON 1 ST DAY OF APRIL, 2001; .. AS IS BROUGHT INTO INDIA BY, OR ON BEHALF OF, THE ASSESSEE IN CONVERTIBLE FOREIGN EXCHANGE WITHIN A PERIOD OF SIX MONTHS FROM THE END OF THE PREVIOUS YEAR OR WITHIN SUCH FURTHER PERIOD AS THE COMPETENT AUTHORITY MAY ALLOW IN THIS BEHALF AND NO DEDUCTION SHALL HE ALLOWED UNLESS THE ASSESSEE FURNISHES A CERTIFICATE IN THE PRESCRIBED FORM, ALONG WITH THE RETURN OF INCOME, CERTIFYING THAT THE DEDUCTION HAS BEEN CORRECTLY CLAIMED IN ACCORDANCE WITH THE PROVISIONS OF T HIS SECTION. 16.1. THE PLAIN READING OF ABOVE PROVISIONS SHOWS THAT THE FOLLOWING CONDITIONS NEEDS TO BE SATISFIED FOR THE PURPOSE OF THE ABOVE SECTION :- (A) THE INDIVIDUAL MUST BE A RESIDENT IN INDIA; (B) HE SHOULD BE AN AUTHOR, PLAYWRIGHT, ARTIST, MUSICIA N AND ACTOR OR SPORTSMAN (INCLUDING AN ATHLETE); (C) THE INCOME SHOULD BE DERIVED BY HIM IN THE EXERCISE OF HI S 32 SHRI SUNIL GAVASKAR PROFESSION; (D) THE INCOME SHOULD BE RECEIVED FROM THE GOVERNMENT O F A FOREIGN STATE OR ANY PERSON NOT RESIDENT IN INDIA. IF ALL THE FOUR CONDITIONS ARE SATISFIED, AN AMOUNT EQUAL TO 60% OF SUCH INCOME SO RECEIVED OR BROUGHT INTO INDIA DURING THE YEAR UNDER CONSIDERATION BY THE ASSESSEE IN CONVERTIBLE FOREIGN EXCHANGE WITHIN A P ERIOD OF SIX MONTHS FROM THE END OF THE PREVIOUS YEAR OR WITHIN SUCH FURTHER PERIOD AS THE COMPETENT AUTHORITY MAY ALLOW, IS DEDUCTIBLE FROM SUCH GROSS TOTAL INCOME. 16.2. ACCORDING TO THE LOWER AUTHORITIES CONDITIONS MENT IONED IN CLAUSE A) AND D) ARE DULY COMPLIED WITH, AS THE ASSESSE E IS RESIDENT INDIVIDUAL IN INDIA AND RECEIVED INCOME FROM A P ERSON NOT RESIDENT IN INDIA. THE REVENUE HAS DISPUTED COMPLIANCE OF THE CONDITIONS MENTIONED ONLY IN CLAUSES (B) AND (C) ABOVE . ACCORDING TO THE AO, THE ASSESSEE WAS NEITHER A SPORTSM AN NOR AN ARTIST NOR AN AUTHOR, AND THUS NOT ELIGIBLE TO CLAIM BEN EFIT OF THIS DEDUCTION. IT WAS FURTHER HELD BY THE REVENUE THAT THE IMPUGNED INCOME WAS NOT DERIVED FROM EXERCISE OF HIS PROFESSION BY THE ASSESSEE AS SPORTSMAN. THEREFORE, W E NEED TO ANALYSE WHETHER THE ASSESSEE HAS FULFILLED BOTH OF THE SE CONDITIONS IN THE GIVEN FACTS OR NOT. 16.3. SINCE, THE TERM SPORTSMAN HAS NOT BEEN DEFINED IN T HE ACT AND THE IMPUGNED PROVISIONS ARE BENEFICIAL PROVIS IONS 33 SHRI SUNIL GAVASKAR INTENDING TO PROVIDE THE BENEFITS TO THE PUBLIC AT LARG E, THEREFORE, IT WOULD BE APPROPRIATE TO ANALYSE THE EXPRE SSION SPORTSMAN AS IS USED COMMONLY BY THE SOCIETY IN GENERIC SENSE. WE HAVE REFERRED TO THE MEANING OF THE TERM SPOR TSMAN IN WIKIPEDIA, AND MEANING EXPLAINED THEREIN IS REPRODUCE D BELOW : SPORTSPERSON FROM WIKIPEDIA, THE FREE ENCYCLOPEDIA JIM THORPE AT THE 1912 SUMMER OLYMPICS A SPORTSPERSON, ALSO KNOWN AS SPORTSMAN OR SPORTSWOMAN, IS A MAN OR WOMAN WHO IS INVOLVED IN SPORTS. IT MAY MEAN SOMEONE WHO IS KNOWN FOR THE PROMOTION OF SPORT OR ATHLETIC ACTIVITIES. A SPORTSPERSON CAN BE A MAN OR A WOMAN WHO IS PERSON TRAINED TO COMPETE OR INTERESTED IN A SPORT INVOLVING PHYSICAL STRENGTH, SPEED OR ENDURANCE. A SPORTSMAN IS A PLAYER IN A SPORT, BUT THE TERM ALSO MEANS SOMEONE WHO PLAYS SPORT IN A WAY THAT SHOWS RESPECT AND FAIRNESS TOWARDS THE OPPOSING PLAYER OR TEAM. THE TERM SPORTSMAN CAN ALSO BE USED TO DESCRIBE A FORME R COMPETITOR WHO CONTINUES TO PROMOTE THE SPORT IN LATER YEARS. FOR EXAMPLE, TSUNEKAZU TAKEDA IS A SPORTSMAN WHO COMPETED IN TWO SUMMER OLYMPIC GAMES AND WHO WAS THE INTERNATIONAL OLYMPIC COMMITTEE (IOC) IN 2012. FROM THE ABOVE DEFINITION, IT IS NOTED THAT THE TERM SPORTSMAN MAY ALSO BE USED TO DESCRIBE A FORMER PLAYER WHO CONT INUES TO REMAIN ASSOCIATED AND ENGAGED, FOR THE PROMOTION OF THE RELATED SPORT ACTIVITIES. THE FACTS OF THE CASE ARE T HAT THE ASSESSEE HAS BEEN UNDOUBTEDLY A CRICKETER OF INTERNATIONAL STATURE. HE WAS HONOURED WITH ARJUN AWARD BY THE 34 SHRI SUNIL GAVASKAR GOVERNMENT OF INDIA AND MAHARASHTRA BHUSHAN BY THE GOVERNMENT OF MAHARASHTRA AS LIFE TIME ACHIEVEMENT AWARD FOR HIS SPORTING EXCELLENCE. IT HAS BEEN SHOWN TO US THAT THE ASSESSEE HAS BEEN PLAYING CRICKET MATCHES IN INDIA AND ABR OAD, EVEN AFTER HE HAD STOPPED PLAYING TOURNAMENTS OF INTERNATI ONAL AND NATIONAL LEVELS. THE EVIDENCES OF SUCH DISTRICT LEVE L AND OTHER SMALLER LEVEL MATCHES PARTICIPATED AND PLAYED BY THE ASSESSEE WERE BRUSHED ASIDE BY THE AO ON THE GROUND THAT SUCH KIND OF TOURNAMENTS AND MATCHES ARE OF NO RELEVANCE. IN OUR VIEW ACTION OF THE AO IS NOT JUSTIFIED. 16.4. IT IS FURTHER NOTED BY US FROM THE CERTIFICATE D ATED 21 ST MAY, 2009 ISSUED BY ICC CRICKET COMMITTEE THAT ASSESS EE WAS NOMINATED BY THE BOARD OF CONTROL FOR CRICKET IN INDIA ( BCCI) AS INDIAN REPRESENTATIVE AND ACCORDINGLY THE ICC EXECUTIV E, BOARD ELECTED THE ASSESSEE AS THE CHAIRMAN OF CRICKET COMMITTEE- PLAYING AT ITS MEETING IN JUNE, 2000. THIS COMMITTEE WAS SUBSEQUENTLY RENAMED AS ICC CRICKET COMMITTEE. THE ASSESSEE REMAINED ITS CHAIRMAN UNTIL HIS RESIGNATION IN MAY, 2008. WE SHALL FURTHER LIKE TO STAT E THE BROAD INTENTION OF SECTION 80RR, AS WAS DISCUSSED IN DE TAIL IN EARLIER PART OF THIS ORDER ALSO, IS TO PROMOTE THE S PORTS AND PERSONS ASSOCIATED WITH IT FOR THE SAKE OF BUILDING UP GREATER UNDERSTANDING OF THE COUNTRY AND AUGMENTING FOREIGN RESOURCES. THUS, IF WE ADOPT A BROADER DEFINITION OF T HE TERM SPORTSMAN, AS WE SHOULD, IN VIEW OF THE LEGAL DISCUSSION MADE 35 SHRI SUNIL GAVASKAR IN EARLIER PARAGRAPHS, THEN, WE CAN CERTAINLY CONSIDER TO INCLUDE THEREIN NOT ONLY A PERSONS WHO ACTIVELY PLAYED IN THE FI ELD IN THE IMPUGNED YEAR BUT ALSO A PERSON WHO HAD BEEN ACTIVELY PLAYING IN THE FIELD IN EARLIER YEARS AND THEREAFTER, HE CONTINUED TO REMAIN ASSOCIATED WITH THE RELATED SPORT AND PROMOT ED THE SAME SPORT, BUT FROM OUTSIDE THE FIELD. OUR VIEW GETS FURTHER STRENGTHENED FROM THIS FACT THAT IN SECTION 80RR, IT HAS B EEN NO WHERE MENTIONED THAT THE SPORTSMAN SHOULD BE THE PERSON WHO IS CURRENTLY PLAYING IN THE FIELD OR THE PERSON EARNING INC OME DIRECTLY FROM PLAYING IN THE FIELD ONLY. THUS, WE FIND THA T THE BROADER OBJECTIVE OF SECTION 80RR IS MET IF WE DEFINE THE TERM SPORTSMAN IN A WIDER SENSE, AS SEEMS TO HAVE BEEN INTENDE D BY THE LEGISLATURE ALSO. IN THIS BACKDROP, IT CAN CERTA INLY BE SAID THAT THE ASSESSEE WAS A SPORTSMAN DURING THE YEAR FOR THE PURPOSE OF SECTION 80RR. 17. AFTER DECIDING THE ABOVE ISSUE, LET US NOW, SEE COM PLIANCE OF THE OTHER CONDITION I.E. WHETHER THE ASSESSEES INCOME INCLUDES ANY INCOME DERIVED BY HIM IN THE EXERCISE OF HIS PROFESSION. 17.1. IF, WE CAREFULLY GO THROUGH SECTION 80RR, WE FIND THAT THIS SECTION HAS BEEN DRAFTED BY THE LEGISLATURE IN SUCH A MANNER THAT IT HAS APPARENTLY INTENDED TO INCLUDE WIDER RANGE OF INCOME DERIVED BY A SPORTSMAN (OR A PERSON BELONGING TO ANY ONE OR MORE OF THE CATEGORIES AS PRESCRIBED IN THE SEC TION) IN 36 SHRI SUNIL GAVASKAR THE EXERCISE OF HIS PROFESSION. IT HAS NOT BEEN STATED IN SECTION THAT THE INCOME SHOULD BE DERIVED BY THE PERSON FROM PLA YING IN THE FIELD OR DIRECTLY EXERCISING THE CORE ACTIVIT Y PERTAINING TO THE CATEGORY TO WHICH THAT PERSON BELONGS. IF THE LEGISL ATURE WOULD HAVE STATED SO, IN THAT CASE THE INTENTION OF THE LEGISLATURE WOULD HAVE BEEN NARROWER IN TERMS OF NATURE OF INCOME TO BE CONSIDERED AS ELIGIBLE FOR DEDUCTION UNDER T HIS SECTION. THUS, WHAT WE UNDERSTAND FROM THE READING OF THE SECTION IS THAT ANY INCOME DERIVED BY THE SPORTSMAN DUR ING THE COURSE OF HIS PROFESSION WHICH ARISE OUT OF CORE ACTIV ITY (I.E. ACTIVITY OF PLAYING IN THE FIELD), AND ALSO OTHER SUBSIDI ARY & ALLIED ACTIVITIES WHICH ARE LINKED TO AND HAVE NEXUS WIT H THE CORE ACTIVITY OF THE SPORTS, SHOULD ALSO BE INCLUDED I N THE SCOPE OF THE INCOME ELIGIBLE FOR DEDUCTION U/S 80RR. WE DO NOT MEAN TO SAY THAT ANY TYPE OF INCOME WHICH HAS REMOTE CONNECTION O R NO CONNECTION WITH OR WHICH ARE INDEPENDENT OF THE CORE ACTIVITY WOULD ALSO BE COVERED IN THIS SECTION. FURTHER , THOSE ACTIVITIES WHICH GO BEYOND THE PARAMETERS OF PROFESSI ON AND TAKE THE SHAPE OF BUSINESS ACTIVITIES SHALL ALSO NOT FA LL IN THE SCOPE OF INCOME DERIVED DURING THE COURSE OF PROFESSION I N THE CONTEXT OF SECTION 80RR. 17.2. THE LEGISLATURE HAS CLEARLY ABSTAINED FROM USING T HE EXPRESSIONS LIKE INCOME DERIVED FROM PLAYING CRICKET ( OR SPORTS), OR PARTICIPATING IN THE GAME, OR WRITING OF BOOKS OR LITERATURE, OR SAY INCOME DERIVED FROM ACTING OR PERFO RMING 37 SHRI SUNIL GAVASKAR SOME ART WORK ETC ETC. RATHER, THE LEGISLATURE WAS CAR EFUL AND CONSCIOUS IN USING THE EXPRESSIONS I.E. INCOME DERIVED BY HIM IN THE EXERCISE OF HIS PROFESSION. THUS, IN OUR V IEW, CLEAR INTENTION OF THE LEGISLATURE IS TO INCLUDE THE IN COMES OF THE ELIGIBLE PERSONS EARNED FROM ALL THE CLOSELY CONNECTED ALLIED ACTIVITIES IN ADDITION TO THE CORE ACTIVITY. 17.3. IN THE CASE OF MILIND C. SHRIVASTAVA V. JCIT, ( 96 ITD 284 (MUM.), HONBLE BOMBAY BENCH OF THE TRIBUNAL HELD THAT UNDER SECTIONS 80HH, 80I, 80IA, AND OTHER SIMILAR SECTIONS, THE MANDATORY REQUIREMENTS OF THE LAW IS THAT INCOME SHOULD BE DERIVED FROM AN INDUSTRIAL UNDERTAKING, WHEREAS, ON THE O THER HAND, U/S 80RR, INCOME HAS TO BE DERIVED IN THE EXERCISE OF PROFESSION. THUS, LANGUAGE USED BY THE LEGISLATURE IN SECT ION 80RR IS TO BE LIBERALLY INTERPRETED. IF ANY INCOME IS DERIVED BY THE ASSESSEE IN THE EXERCISE OF HIS CARRYING ON HIS PROFES SION, THE ASSESSEE WOULD BE ELIGIBLE FOR DEDUCTION U/S 80RR. THUS, IT WAS HELD THAT ASSESSEE, BEING A MUSIC DIRECTOR FALL IN T HE CATEGORY OF AN ARTIST AND WOULD BE ELIGIBLE TO CLAI M DEDUCTION U/S 80RR. IN THE SAID CASE THE AMOUNT WAS RECEIVED AS A N ADVANCE BY THE SAID ASSESSEE FOR PERFORMING MUSIC SHO WS ABROAD. BUT HIS MUSIC SHOWS GOT CANCELLED DUE TO CERTAI N UNCONTROLLABLE REASONS. THE AO DENIED THE BENEFIT OF DEDUC TION ON THE GROUND THAT THE INCOME WAS NOT EARNED FROM PERFORMIN G ANY SHOWS AND THEREFORE, ASSESSEE DID NOT EXERCISE HIS PROFESSION IN EARNING THE ELIGIBLE INCOME. THE BENCH ANALYSE D 38 SHRI SUNIL GAVASKAR THE PROVISIONS OF SECTION 80RR AND HELD THAT PROVISIONS OF SECTION 80RR SHOULD BE LIBERALLY INTERPRETED AS THE W ORD USED IN THIS SECTION ARE ANY INCOME DERIVED IN THE EXERCISE O F PROFESSION, IN CONTRA-DISTINCTION TO SECTIONS 80HH, 80I , 80IA AND TO OTHER SIMILAR SECTIONS WHERE THE MANDATORY REQUIR EMENT OF THE LAW IS THAT THE GROSS TOTAL INCOME OF THE ASSESSE E INCLUDES INCOME DERIVED FROM ANY INDUSTRIAL UNDERTAKING. U NDER THESE CIRCUMSTANCES, IT WAS HELD BY THE HONBLE BENCH THAT EVEN, IF THE SHOWS WERE NOT PERFORMED BY THE ASSESSEE BUT SINCE THE SECTION HAS TO BE LIBERALLY INTERPRETED, THER EFORE, IT CAN BE SAID THAT INCOME WAS DERIVED BY THE ASSESSEE IN THE COURSE OF HIS PROFESSION. 17.4. WE HAVE CAREFULLY GONE THROUGH FACTS RELATING TO IMPUGNED INCOME RECEIVED BY THE ASSESSEE FROM M/S. ES PN STAR SPORTS. FOR PROPERLY APPRECIATING THE FACTS, WE HAVE REFERRED TO SOME OF THE RELEVANT CLAUSES OF THE AGREE MENT OF THE ASSESSEE WITH M/S. ESPN STAR SPORTS, REPRODUCED HEREUNDER: 2(A) ESPN STAR SPORTS HEREBY ENGAGES YOU TO RENDER SERVICES ON AN EXCLUSIVE BASIS AS A PRESENTER, REPORTER AND COMMENTATOR FOR ITS SPORTS PROGRAMMING SERVICE (THE PROGRAMMING) AND SUCH OTHER SERVICES AS DESCRIBED HEREIN AND YOU AGREE TO RENDER SUCH SERVICES. YOU SHALL PERFORM THE SERVICES, UNDER ESPN STAR SPORTS DIRECTION AND CONTROL, AS A PRESENTER AND COMMENTATOR, INCLUDING BUT NOT LIMITED TO ON THE AIR APPEARANCES, VOICE OV ER ANNOUNCEMENTS, COMMENTARY, INTERVIEWS, ESPN STAR SPORTS COMMERCIALS AND PROMOTIONS, RADIO 39 SHRI SUNIL GAVASKAR APPEARANCES, AUDIO RECORDINGS, NARRATION, HOSTING REHEARSALS, VOCAL RECORDINGS (LOOPING, POST-SYNCHIN G AND THE LIKE), COSTUME FITTING AND OTHER PRE- AND P OST- PRODUCTION ACTIVITIES, AND RELATED SERVICES AS WELL AS SUCH PROGRAMS AS ESPN STAR SPORTS MAY FROM TIME TO TIME ELECT TO PRODUCE FOR OR EXHIBIT ON ESPN STAR SPORTS. IN ADDITION, YOU SHALL ALSO BE AVAILABLE FOR S ALES FUNCTIONS, CROSS-CHANNEL PROMOTIONS, PHOTOGRAPHY SESSIONS, PUBLICITY AND PROMOTIONAL APPEARANCES, APPEARANCES FOR MARKETING AND ADVERTISING PURPOSES ON OTHER CHANNELS OWNED OR OPERATED BY ESPN STAR SPORTS AND ANY OF THEIR ASSOCIATED COMPANIES, RADIO APPEARANCES AND OFF-THE-AIR PERSONAL APPEARANCES FOR PROMOTIONAL PURPOSES AS ESPN STAR SPORTS MAY REQUIRE (THE 'PROJECT SERVICES') (B) FOR THE PURPOSES OF THIS AGREEMENT, SPORTS PROGRAMMING SHALL CONSIST OF COMMENTATING, PRESENTING OR BEING AN EXPERT GUEST ON ANY CRICKET TOURNAMENTS BEING BROADCAST BY ESPN STAR SPORTS, CONTRIBUTING TO ANY MAGAZINE OR NEWS' SHOWS BROADCA ST INCLUDING 'INSIDE CRICKET' BY ESPN STAR SPORTS AND ANY SPECIFIC ANCILLARY PROGRAMMING FOR A CRICKET WO RLD CUP, MINI WORLD CUP OR TEST CHAMPIONSHIPS. ANY STUDIO SHOW OF THIRTY (30) MINUTES OR MORE IN DURATION, SUCH AS STUMPED, SHALL NOT BE INCLUDED IN THIS AGREEMENT AND YOU SHALL BE REIMBURSED SEPARATELY, THE TERMS OF WHICH SHALL HE MUTUALLY AGREED UPON.......................... 17.5. IN THE FACTS OF THE CASE BEFORE US, IT IS NOTED THAT THE ASSESSEE HAS DERIVED ITS INCOME AS A RESULT OF HIS AGRE EMENT WITH M/S ESPN STAR SPORTS FOR THE SERVICES PROVIDED B Y THE ASSESSEE AS A PRESENTER AND COMMENTATOR AND OTHER ALLIED ACTIVITIES WHICH HAVE BEEN DISCUSSED IN THE RELEVANT CLAUS ES OF THE AGREEMENT. THUS, ASSIGNMENT HAS BEEN GIVEN TO THE ASSESSEE AND THIS ROLE HAS BEEN PERFORMED BY HIM EFFE CTIVELY, 40 SHRI SUNIL GAVASKAR BECAUSE OF HIS HAVING BEEN A CRICKETER OF INTERNATIONAL STATURE AND HE WAS CHOSEN FOR THE SKILL AND KNOWLEDGE HE POSSESSED AND THE DELIVERY HE COULD HAVE GIVEN BECAUSE OF THIS SKIL L AND EXPERIENCE. WE CAN, UNHESITATINGLY, SAY THAT THE CONTRIBUTI ON FOR PROMOTION TO THE GAME OF CRICKET IS POSSIBLE NOT O NLY WHILE PLAYING IN THE FIELD BUT ALSO OUTSIDE THE FIELD WHILE PERFORMING VARIOUS OTHER CRUCIAL ROLES, LIKE THAT OF A COACH, EMP IRE AND COMMENTATOR ETC. THE ENTIRE ROLE OF THE ASSESSEE AND TH E ACTIVITY PERFORMED BY HIM FOR WHICH HE WAS REMUNERATED , HAVE A DIRECT AND PROXIMATE LINK WITH THE GAME OF CRICKET. IN THE GIVEN FACTS OF THIS CASE, ONE CANNOT VISUALISE EARNING OF THIS INCOME, DE-HORSE THE ASSESSEE HAVING BEEN A CRICKETER AND A SPORTSMAN AND NOR CAN IT BE VISUALISED INDEPENDENT OF THE GAME OF CRICKET. WE HAVE ALREADY HELD IN EARLIER PART OF OUR ORDER THAT ASSESSEE FALLS IN THE CATEGORY OF A SPORTS MAN. THUS, IN OUR CONSIDERED OPINION, THE FACTS OF THIS SUGGEST THA T THE IMPUGNED INCOME HAS BEEN DERIVED BY THE ASSESSEE IN THE EXERCISE OF HIS PROFESSION AS A SPORTSMAN. 17.6. DURING THE COURSE OF HEARING, LD. DR HAD RELIED U PON THE DECISION OF TRIBUNAL IN THE CASE OF HARSHA BHOGLE VS ITO 114 TTJ 266, AND SUBMITTED THAT MR. BHOGLE WAS ALSO COMMENTATOR AND CLAIMED DEDUCTION U/S 80RR, WHICH WAS DENIED BY THE AO AND HIS ACTION WAS CONFIRMED BY THE TRIBUNAL. WE HAVE GONE THROUGH THIS DECISION AND FIND THAT MR. BHOGLE HAD CLAIMED DEDUCTION U/S 80RR AS AN ACTOR/ARTIST. HE NEVER MADE A CLAIM 41 SHRI SUNIL GAVASKAR AS A SPORTSMAN. THUS ISSUE BEFORE THE BENCH WAS DIFFERENT AND THE FACTS OF THE SAID CASE AND RATIO DECIDED THEREIN AR E NOT APPLICABLE ON THE FACTS OF THE CASE BEFORE US. 18. THE ASSESSEE HAD MADE ANOTHER ALTERNATIVE ARGUMENT, ON WITHOUT PREJUDICE BASIS THAT IF ASSESSEE IS NOT TREATE D AS A SPORTSMAN, THEN HE SHALL FALL IN ANOTHER CATEGORY NAMELY ARTIST. IT HAS BEEN CONTENDED THAT WHILE PERFORMING THE ROLE OF COMMENTATOR AND PRESENTER, THERE WAS AN ELEMENT OF ART INVOLVED IN THE PERFORMANCE OF THE ASSESSEE, AND ASSESS EES PERFORMANCE WAS LIKE THAT OF AN ARTIST, AND THEREFORE, VIEWED FROM THIS ANGLE ALSO THE IMPUGNED INCOME DERIVED BY T HE ASSESSEE IN THE EXERCISE OF HIS PROFESSION AS AN ARTI ST IS ELIGIBLE FOR DEDUCTION U/S 80RR, AND IN SUPPORT OF HIS A RGUMENT LD COUNSEL RELIED UPON THE JUDGMENTS OF CIT VS. TARUN R.TAHILIANI, 328 ITR 629 (BOM), AMITABH BACHCHAN V. DC IT (12 SOT 95 ITAT-MUM.), PREM PRAKASH V. ITO, (ITAT-DELHI IN ITA 60/DEL/1989), SACHIN TENDULKAR V. ACIT (ITAT-MUMBAI IN I TA NO.428 TO 430/MUM/2008)AND DCIT V. M/S. PREETI VYAS, ( 314 ITR (AT) 69 (MUM). HE HAD ALSO REFERRED TO VARIOUS CLA USES OF AGREEMENT BETWEEN ASSESSEE AND ESPN STAR TO SUPPORT HIS CLAIM. BUT, SINCE WE HELD THAT ASSESSEES CASE FALLS IN THE CATEGORY OF A SPORTSMAN, THEREFORE WE ARE NOT GOING INTO THIS ASPECT, AND LEAVING IT OPEN AT THIS STAGE. 42 SHRI SUNIL GAVASKAR 19. THUS, THE FACTS OF THIS CASE SUGGEST THAT THE ASSESSE E IS ELIGIBLE TO CLAIM DEDUCTION U/S 80RR, AND THEREFORE NO B ELIEF COULD HAVE BEEN FORMED FOR ESCAPEMENTS OF HIS INCOME. THE CLAIM IS ALLOWABLE ON MERITS ALSO, AS DISCUSSED ABOVE IN DETAIL. THUS, THE BENEFIT OF DEDUCTION CLAIMED U/S 80RR WAS IN ACCORDANCE WITH LAW, AND THEREFORE, DISALLOWANCE MADE BY THE AO IN THIS REGARD IS DIRECTED TO BE DELETED. 20. AS A RESULT GROUND NOS. 1, 2 & 3 ARE ALLOWED AND GROUND NO.4 IS CONSEQUENTIAL, THEREFORE, DISMISSED AND GROUND NO.5 IS GENERAL AND DOES NOT NEED ANY SPECIFIC ADJUDICATION. NOW WE SHALL TAKE UP ASSESSEES APPEAL FOR AY 2002- 03 IN ITA NO.3971/MUM/2010: 21. IN THIS APPEAL ALSO THE ISSUE INVOLVED AND THE FACTS ARE IDENTICAL TO A.Y. 2001-02. THE GROUNDS RAISED BY THE ASS ESSEE ARE ALSO IDENTICAL. THE REOPENING HAS BEEN DONE ON THE SAM E REASON THAT DEDUCTION U/S 80RR WAS WRONGLY CLAIMED BY T HE ASSESSEE. IN THE A.Y. 2001-02, WE HAVE HELD THAT IN THE GIVEN FACTS OF THE CASE, NO BELIEF COULD HAVE BEEN FORMED AB OUT ESCAPEMENT OF INCOME AND IT HAS ALSO BEEN HELD THAT ASSES SEE HAD RIGHTLY MADE A CLAIM AS PER LAW, AND THEREFORE, WE HAVE QUASHED THE REOPENING ON VARIOUS GROUNDS AND ALSO HELD THE CLAIM U/S 80RR AS ALLOWABLE TO THE ASSESSEE. THUS, OU R ORDER FOR A.Y. 2001-02 SHALL APPLY MUTATIS MUTANDIS ON THE FACTS OF THIS YEAR AS WELL AS ON THE ISSUES RAISED BY THE ASSESS EE IN THE APPEAL OF THIS YEAR. ACCORDINGLY, GROUND NOS. 1, 2, & 3 ARE 43 SHRI SUNIL GAVASKAR ALLOWED, GROUND NO.4 IS CONSEQUENTIAL AND THEREFORE, DISM ISSED, AND GROUND NO.5 IS GENERAL AND DOES NOT NEED ANY SPECIFI C ADJUDICATION. 22. AS A RESULT, BOTH THE APPEALS ARE PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 16 TH MARCH, 2016. SD/- (SAKTIJIT DEY ) SD/- (ASHWANI TANEJA) JUDICIAL MEMBER ACCOUN TANT MEMBER MUMBAI, DATED: 16 TH MARCH, 2016. PATEL, P.S. COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE. TRUE COPY BY ORDER (DY./ASSTT. REGISTRAR) ITAT, MUMBAI