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2020 (12) TMI 343 - AT - Income TaxExemption u/s 11 - proviso to section 2(15) is invoked in the case of the assessee as the activities of the assessee are being run on commercial basis - assessee is a society trust registered under Rajasthan Society Trust Registration Act, 1958 and also registered under Sport Association’s Registration Accreditation Act, 2005 - CIT (A) held that the registration of the assessee society u/s 12A has been restored by the Tribunal vide its order dated 09.06.2016 and it is thus entitled to claim exemption under section 11 and 12 - CIT(A) held that the activities of the assessee are charitable in nature though the same are the objects of general public utility but the primary or dominant purpose is to carrying out the general public utility and not earning the profit - HELD THAT:- It is not in dispute that the registration of the assessee society u/s 12A has been restored by the Tribunal and on appeal by the Revenue, the order so passed by the Tribunal has been affirmed by the Hon’ble Rajasthan High Court. [2018 (8) TMI 196 - RAJASTHAN HIGH COURT]. Primary condition for availing exemption under section 11 and 12 of the Act that the assessee society should be registered u/s 12A is satisfied in the instant case. Applicability of proviso to section 2(15) for the impugned assessment year 2010-11 to the assessee society by virtue of which, can it be denied the exemption claimed u/s 11 and 12 - Assessee has given grants to various district cricket association in the nature of subsidy, grants for infrastructure development and for buying cricket equipments. We find that by incurring such expenditure by way of grants to the district cricket association, the assessee society is contributing to creation of necessary infrastructure and purchase of equipments however such infrastructure and equipments results in creation/enhancement of existing/new infrastructure or acquisition of assets in the hands of the district cricket association, however as far as the assessee society is concerned, such an expenditure doesn’t result in creation of any asset or advantage of enduring benefit in the hands of the assessee society and therefore, the same cannot be termed as capital expenditure. There is no dispute that the assessee is duly registered u/s 12A of the Act and is eligible for exemption under section 11 and 12 of the Act and therefore, the said expenditure is clearly in nature of application of income as the same has a direct nexus with the objectives of the assessee society in terms of promotion of sport of cricket in the state of Rajasthan.- Decided in favour of assessee.
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