DCIT, CHENNAI V. M/s. Tamil Nadu Cricket Association, CHENNAI

ITA 411/CHNY/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5077 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 18-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S BHARATH IRS CIT
• Assessee Lawyers: V RA VICHANDRAN
• Keywords: Depreciation; Set aside
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI , , BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./I.T.A. NO. 411/CHNY/2019 ! ' / ASSESSMENT YEAR : 2014-15 THE DEPUTY COMMISSIONER OF INCOME TAX (EXEMPTIONS) CHENNAI CIRCLE CHENNAI. VS. TAMIL NADU CRICKET ASSOCIATION, NO.5, M.A. CHIDAMBARAM STADIUM, VICTORIA HOSTEL ROAD, CHEPAUK, CHENNAI 600 005. [PAN AAAAT 0398M] ( / APPELLANT) ( /RESPONDENT) # $ % / APPELLANT BY : SHRI. S. BHARATH, IRS, CIT. &' # $ % /RESPONDENT BY : SHRI. V. RAVICHANDRAN, C.A. ( ) $ * /DATE OF HEARING : 13-05-2019 +,'! $ * /DATE OF PRONOUNCEMENT : 16-05-2019 / O R D E R PER INTURI RAMA RAO , ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED AG AINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS)-17, ITA NO.411/CHNY/2019. :- 2 -: CHENNAI (HEREINAFTER CALLED AS CIT(A)) DATED 28.1 1.2018 FOR THE ASSESSMENT YEAR 2014-15. 2. THE REVENUE RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THE ORDER OF THE LEARNED CIT(A) IS CONTRARY TO THE LAW AND FACTS OF THE CASE. 2. THE LD. CIT(A) ERRED IN HOLDING THAT THE TRUST IS ELIGIBLE FOR EXEMPTION U/S.11 OF THE INCOME TAX ACT AND THE TRUST IS NOT HIT BY THE AMENDEDPROVISIONS O F SEC. 2(15) OF THE ACT UNDER THE OBJECT OF 'GENERAL PUBLIC UTILITY'. 2.1 THE ID CIT(A) 0U GHT TO HAVE CONSIDERED THAT THE ASSESSEE HAS RECEIVED SUBSCRIPTION, RENT FOR HIRING GROUND, FEES FOR PROVIDING SERVICES TO IPL, INCOME FROM ADVERTISEMENTS, SUBSIDY FROM BCCI, SALE OF TICKET FOR CONDUCTING OF MATCHES RESTAURANT AND CATERING INCOME DURING THE A.Y. 2014-15 AND OUGHT TO HAVE APPRECIATED THAT THE ABOVE RECEIPTS OF THE ASSESSEE ARE IN THE NATURE OF 'GENERAL PUBLIC UTILITY' AS PE R THE AMENDED PROVISIONS OF SEC.2(15) OF THE IT. ACT. 2.2 T TO HAVE APPRECIATED THAT THE FINANCE ACT 2008 W.E.F. 1.04.2009 HAS M DE A VERY FUNDAMENTAL AND RADICAL CHANGE BY EXCLUDING A GROUP OF TRUSTS FROM ENGAGING INTO TRADE AND BUSINESS RELATED ACTIVITIES . THEREFORE THESE TRUSTS WHICH ARE PURSUING THE RESIDUARY CATEGORY OBJECTS UNDER 'CHARITABLE PURPOS E' ARE DEBARRED FROM HAVING ANY TRADE OR BUSINESS RELATED ACTIVITY. 2.3 THE ID. CIT (A) OUGHT TO HAVE CONSIDERED THE AMENDMENT MADE TO THE INCOME TAX ACT AS SPECIFIED IN SEC 13(8) W.E.F. 1/4/2009. 2.4 THE ID. CIT (A) OUGHT TO HAVE APPRECIATED THAT THE DEPARTMENT HAS NOT ACCEPTED THE DECISION OF THE HON'BLE ITAT IN THE ASSESSEE'S OWN CASE FOR THE A.Y. 2011-12 AND 2012-13 DATED 31.05.2017 ON WHICH THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS RELIED UPON. ITA NO.411/CHNY/2019. :- 3 -: 2.5 THE ID.CIT(A) OUGHT TO HAVE FOLLOWED THE DECISION OF HON'BLE ITAT, PANAJI BENCH IN THE ASSESSEE OF ENTERTAINMENT SOCIETY OF GOA VS. COMMISSIONER OF INCOME- TAX (2013)34 TAXMANN. COM 210. 3. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING, IT IS PRAYED THAT E ORDER O F THE LEARNED CIT(APPEALS) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED. 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE RESPONDENT-ASSESSEE NAMELY TAMIL NADU CRICKE T ASSOCIATION IS A SOCIETY REGISTERED UNDER THE TA MIL NADU SOCIETIES REGISTRATION ACT. THE SOCIETY WAS FORMED WITH THE FOLLOWING OBJECTIVES. (A) TO MAINTAIN A GENERAL CONTROL OF THE GAME OF CRICKET IN THE STATE AND THE UNION TERRITORY OF PONDICHERY AND GIV E IS DECISION ON ALL MATTERS CONCERNING THE GAME EITHER WHEN REFE RRED TO SUO MOTO. (B) TO SPREAD THE GAME THROGHOUT THE STATE BY ORGAN IZING TOURNAMENTS, INCLUDING INTER-UNIVERSITY, INTER-SCHO OL AND INTER- ASSOCIATION MATCHES, TO EDUCATE YOUNG SPORTSMEN IN THE GAME GENERALLY AND ALSO IN THE FIELD OF PHYSICAL CULTUR E AND THE SPIRIT OF SPORTSMANSHIP. THE BENEFIT WOULD BE AVAILABLE TO THE GENERAL PUBLIC IRRESPECTIVE OF CASTE, CREED, RELIGION OR S EX. (C) TO MAINTAIN A LIBRARY OF BOOKS, PUBLICATIONS AND PERIODICALS OF INTEREST OF SPORTSMEN AND TO DIFFUSE KNOWLEDGE OF C RICKET AND ITS IDEALS OF SPORTSMANSHIP. (D) TO COMMUNICATE WITH PUBLIC AUTHORITIES AND VAR IOUS SPORTS ORGANIZATIONS IN INDIA AND ABROAD AND CONCERT AND PRO MOTE MEASURES FOR THE DEVELOPMENT OF THE GAME AND TO PRO VIDE SOCIAL SECURITY SEFE GUARDS FOR THE PLAYERS, OFFICIALS SUC H AS MANAGERS COACHES, UMPIRES, SELECTOR AND OTHERS WHO ARE DIREC TLY CONNECTED WITH THE GAME ITA NO.411/CHNY/2019. :- 4 -: (D) TO AFFORD REQUIRED FACILITIES FOR THE CRICKETER S, OFFICIALS SUCH AS MANAGERS, COACHES, UMPIRES, SELECTORS AND OTHERS WH O ARE DIRECTLY CONNECTED WITH THE GAME, MEMBERS TO ACQUIR E BY PURCHASE, LEASE, HIRE OR OTHERWISE SUITABLE PLAYGRO UNDS, STADIA AND ANY OTHER PROPERTY, MOVABLE AND IMMOVABLE, RIGH TS OR PRIVILEGES ETC. (E) 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 A HEALTHY BODY. F) TO ESTABLISH, PROMOTE OR ASSIST IN ESTABLISHING AND PROMOTING AND TO SUBSCRIBE TO AND BECOME A MEMBER OF ANY OTHE R ASSOCIATION OR CLUB WHOSE OBJECTS ARE SIMILAR OR IN PAR TTO THE OBJECTS OF THE ASSOCIATION TO CREATE, FOSTER AND MA INTAIN FRIENDLY RELATIONS WITH AND AMONG THE POPULATION OF THE AREA UNDER ITS CONTROL THROUGH SPORTS, TOURNAMENTS AND COMPETITIONS CONNECTED THEREWITH G) TO CREATE, DEVELOP AND FOSTER A HEALTHY SPIRIT O F SPORTSMANSHIP AND A BROAD AND GENEROUS OUTLOOK DEVOID OF 11 PREJU DICES AND TO MOULD THE CHARACTER OF CITIZEN THROUGH THE MEDIUM O F SPORTS IN GENERAL AND CRICKET IN PARTICULAR, TO SPREAD THE ID EALS OF CRICKET AND ALL THAT IT STANDS FOR THROUGH THE LENGTH AND B READY OF ITS AREAS BY ARRANGING SCHOOLS FOR COACHING, LECTURES, TOURNAMENTS AND RUN INTERNATIONAL MATCHES BETWEEN : INDIA AND OTHER LEADING FOREIGN COUNTRIES SO AS TO DEVELOP MUTUAL GOODWILL AND BETTER UNDERSTANDING BETWEEN INDI AND OTHER COUNTRIES (H) TO COLLECT FUNDS AND NECESSARY BORROW WITH OR W ITHOUT SECURITY FOR PURPOSES OF THE ASSOCIATION AND IN PAR TICULAR BY THE ISSUE OF DEBENTURES OR DEBENTURE STOCK PERPETUAL OR OTHERWISE CHARGED UPON ALL OR ANY OF THE ASSOCIATION'S PROPER TY BOTH OR FUTURE AND THE PURCHASE, REDEEM OR PAYOFF ANY SUCH SECURITIES AND TO UTILISE SUCH F UNDS IN SUCH MANNER AS THE GENERAL BODY MAY CONSIDER DESIRABLE FOR THE FULFILL MENT OF THE OBJECTS OF THE ASSOCIATION. (I)TO INVEST MONIES AND FUN S OF THE ASSOCIATION AS PER THE PROVISIONS OF THE INCOME TAX ACT,1961; TO MAINTAIN A PANEL OF APPROVED CRICKET UMPIRES AND TO DO SUCH ACTS AS MAY BE NECESSARY FOR THIS PURPOSE INCLUDING HOLDING OF PRE SCRIBED PERIODICAL TESTS WITH A VIEW TO ENABLE THEM TO QUAL IFY THEMSELVES AS FIRST CLASS UMPIRES ITA NO.411/CHNY/2019. :- 5 -: (J) TO ORGANIZE A PROPER COACHING SCHEME FOR THE BENEFIT OF CRICKETERS IN THE CITY AND THE DISTRICTS UNDER THE SUPERVISION OF COACHES FROM INDIA AND ABROAD; TO TAKE SU 1 ACTION AS MAY BE NECESSARY TO COORDINATE THE ACTIV ITIES OF AFFILIATED CLUB, DISTRICT ASSOCIATIONS AND INSTITUT ION AND THEIR MEMBERS IN RELATION TO THE ASSOCIATION AND AMONG THEMSELVES & TO DO ALL SUCH OTHER ACTS, DEEDS AND THINGS AS ARE INCIDENTAL TO AS THE ASSOCIATION MAY DEEM CONDUCIVE TO THE ATTAINMENT OF THE OBJECTS OF THE A SSOCIATION. IT WAS DULY REGISTERED U/S.12AA OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). THE RETURN OF INCOME FOR THE AY 2014 -15 WAS FILED ON 30.09.2014 DISCLOSING NIL INCOME AFTER CLAI MING EXEMPTION U/S.11 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). AGAINST THE SAID RETURN OF INCOME, THE ASSESSMENT WAS COMPLETED BY T HE DY. CIT (EXEMPTIONS), CHENNAI CIRCLE, CHENNAI (HEREINAFTER CALLED AS AO') VIDE ORDER DATED 31.12.2016 PASSED U/S. 143(3) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) AT TOTAL INCOME OF RS. 23,34,18,071/-, WHILE DOING SO, THE AO HAD DENIED EXEMPTION U/S.11 OF THE ACT INVOKING THE PROVISION OF SECTION 2(15) OF THE ACT. ACCORDING TO THE LD. ASSESSING OFFICER, OBJECTIVE OF THE APPELLANT SOCIE TY ARE IN THE NATURE OF TRADE, COMMERCE OR BUSINESS OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO TRADE, COMMERCE OR BUSINESS FOR A CESS OR FEE OR ANY OTHER CONSIDERATION. THE ASSESSING OFFICER ALS O DENIED DEPRECIATION HOLDING TO BE DOUBLE DEDUCTION, PLACI NG RELIANCE ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF E SCORTS LTD VS. UNION OF INDIA, 199 ITR 43. ITA NO.411/CHNY/2019. :- 6 -: 4. BEING AGGRIEVED BY THE ABOVE ADDITIONS, AN APPEAL W AS PREFERRED BEFORE LD. CIT(A), WHO VIDE IMPUGNED ORDE R ALLOWED THE GROUNDS OF APPEAL FOLLOWING THE DECISION OF CO-OR DINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEA RS 2008-09, 2009- 10 AND 2010-2011 IN ITA NOS.1535, 1536 AND 1537/MDS /2014, WHEREIN IT WAS HELD THAT PROVISO TO SECTION 2(15) O F THE ACT IS NOT ATTRIBUTABLE, AS THE ASSESSEE IS NOT ENGAGED IN CON DUCTING ANY BUSINESS ACTIVITY. 5. BEING AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE U S CHALLENGING THE CORRECTNESS OF THE DECISION OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS). 6. ON THE OTHER HAND, THE LD. COUNSEL PLACED RELIANCE ON THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS). 7. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATE RIAL ON RECORD. THE ISSUE IN THIS APPEAL IS COVERED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE IN ASSESSEES OWN CASE FOR A SSESSMENT YEARS 2008-09, 2009-10 AND 2010-2011 IN ITA NOS.1535, 153 6 AND 1537/MDS/2014, DATED 14.08.2015, WHEREIN IT WAS HEL D AS FOLLOWS:-. 15. NOW, LETS EXAMINE WHETHER THE ACTIVITY OF CONDUCTING ONEDAY MATCHES, T-20 MATCHES AND INDIAN PREMIER LEAGUE MATCHES WOULD AMOUNT TO DOING BUSINESS OR TRADE. IT IS THE CASE OF THE REVENUE TH AT THE ASSESSEE-SOCIETY IS CONDUCTING OR ORGANIZING T20, O NE- DAY MATCHES OR INDIAN PREMIER LEAGUE MATCHES. IN FA CT, ITA NO.411/CHNY/2019. :- 7 -: BCCI, THE PARENT ORGANIZATION WHICH IS A NATIONAL B ODY IN INDIA, IS ORGANIZING AND CONDUCTING THE MATCHES. THE ASSESSEE-SOCIETY, BEING A MEMBER OF BCCI, HOSTS THE MATCHES WHICH ARE CONDUCTED BY BCCI. FOR THE PURPOS E OF MEETING ITS EXPENDITURE, THE BCCI ALLOCATES FUND S FROM THE REVENUE IT COLLECTED FROM ADVERTISEMENT AN D OTHER SOURCES. THE ASSESSEE-SOCIETY IS ALLOWED TO S ELL TICKETS TO THE CRICKET VIEWERS. NO DOUBT, THE PLAYE RS OF INDIAN PREMIER LEAGUE ARE SOLD IN PUBLIC AUCTION FO R VERY HUGE AMOUNT. BUT THE QUESTION IS WHO IS CONDUCTING AND WHO IS AUCTIONING, WHETHER THE ASSESSEE-SOCIETY OR BCCI? IN FACT, BCCI CONDUCTS THE PUBLIC AUCTION FOR SELLING PREMIER PLAYERS AT A HUGE PREMIUM RATE. IN FACT, THE BCCI COLLECTS THE MONEY. THE ROLE OF THE ASSESS EE- SOCIETY IS ONLY TO PROVIDE STADIUM FOR CONDUCTING MATCHES. OTHER THAN THAT, THE ASSESSEE-SOCIETY HAS NO ROLE IN CONDUCTING THE INTERNATIONAL MATCHES AND IN DIAN PREMIER LEAGUE MATCHES. 16. THE OTHER ACTIVITY OF THE ASSESSEE-SOCIETY IS T O CONDUCT TRAINING PROGRAMMES, COACHING CLASSES FOR COLLEGE STUDENTS AT DISTRICT LEVEL IN THE STATE OF TAMIL NADU AND IN THE UNION TERRITORY OF PUDUCHERRY. THE ASSESSEE IS ALSO CONDUCTING INTER-UNIVERSITY, INTER SCHOOL AND INTER-ASSOCIATION MATCHES. EXPENDITURES INVOLVE D IN SUCH ACTIVITIES WERE MET OUT OF SURPLUS FUNDS REMAI NING WITH THE ASSESSEE-SOCIETY. THE ASSESSING OFFICER GO T CONFUSED HIMSELF WITH THE ACTIVITY CARRIED ON BY TH E 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 PREMIER LEAGUE MATCHES ARE ALL CONDUCTED BY THE BCCI AND THE ASSESSEE, BEING THE HOST IN THE STATE OF TAMIL NADU , IS ONLY PROVIDING ITS STADIUM. THE ASSESSEE HAS ALSO RECEIVED FUNDS FROM BCCI FOR MEETING THE EXPENDITUR E, BEING THE HOST. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT AT ANY STRETCH OF IMAGINATI ON, IT CANNOT BE SAID THAT THE ASSESSEE IS CONDUCTING ANY BUSINESS ACTIVITY. THE ASSESSEE IS ALSO NOT PROVIDI NG ANY SERVICE TO ANY TRADE, COMMERCE OR INDUSTRY. IN THOS E CIRCUMSTANCES, THIS TRIBUNAL IS OF THE CONSIDERED O PINION THAT PROVISO TO SECTION 2(15) OF THE ACT IS NOT APP LICABLE TO THE ASSESSEE. IN VIEW OF THE ABOVE DISCUSSION, T HE ASSESSEE IS ELIGIBLE FOR EXEMPTION UNDER SECTION 11 OF THE ACT FOR ALL THE ASSESSMENT YEARS UNDER CONSIDERATION. ACCORDINGLY, THE ORDERS OF THE LOWER ITA NO.411/CHNY/2019. :- 8 -: 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 ASSESSING OFFICER IS ALSO DIRECTED TO GRANT EXEMPTI ON UNDER SECTION 11 OF THE ACT FOR THE ASSESSMENT YEAR 2008-09 ALSO. IN VIEW OF THE DECISION OF CO-ORDINATE BENCH IN AS SESSEES OWN CASE THAT PROVISO TO SECTION 2(15) OF THE ACT IS NOT APP LICABLE, WE DO NOT FIND ANY MERITS IN THE APPEAL OF THE REVENUE. ACCOR DINGLY, APPEAL OF THE REVENUE IS DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMIS SED. ORDER PRONOUNCED ON 16TH DAY OF MAY, 2019, AT CHEN NAI. SD/- SD/- ( ) (GEORGE MATHAN) /JUDICIAL MEMBER ( ) (INTURI RAMA RAO) /ACCOUNTANT MEMBER -) / CHENNAI . / DATED:16TH MAY, 2019. KV /0 $0& *12032'* / COPY TO: 0 1 . # / APPELLANT 3. 0 ( 4*056 / CIT(A) 5. 278 0& * 9 / DR 2. &' # / RESPONDENT 4. 0 ( 4* / CIT 6. 8:0;) / GF