2021 (1) TMI 1348 - AT - Income Tax

Addition u/s. 56 (2) (vii) - receipt of one time reward from BCCI - whether the onetime payment received from BCCI is exempt from tax or not? - appellant is a well known former Indian cricketer - HELD THAT - The answer lies in the provisions of section 56 (2) (vii) second proviso which states that clause (vii) was not apply to any some of money or any property received from (g) any trust or institution registered u/s.12 AA . We find that BCCI is a registered trust u/s.12 AA and the said evidence is available in the public domain. No merit in the impugned addition and accordingly direct the AO to delete the addition. Appeal filed by the assessee is allowed.

Summary

The Appellate Tribunal ITAT Delhi, comprising Accountant Member Sh. N. K. Billaiya and Judicial Member Sh. Sudhanshu Srivastava, addressed an appeal concerning the addition of Rs.75,09,600/- under section 56(2)(vii) of the Income Tax Act. The appellant, a former Indian cricketer, received this amount as a one-time benefit payment from BCCI, which he did not include in his income tax return, citing CBDT Circular No.447 dated 22.01.1986. However, the Assessing Officer (AO) dismissed this reliance, referencing CBDT Circular No.2 of 2014, which superseded the earlier circular, and included the amount in the appellant's income.The core issue was whether the payment from BCCI was exempt from tax under section 56(2)(vii). The Tribunal noted that the second proviso of this section exempts sums received from institutions registered under section 12AA. Since BCCI is a registered trust under section 12AA, the Tribunal found no merit in the addition made by the AO and directed the deletion of the Rs.75,09,600/- addition. Consequently, the appeal was allowed, and the decision was announced in open court on 06.01.2021.