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2022 (9) TMI 1308 - AT - Income TaxExemption u/s 11 - assessee received substantial amounts from big corporate houses as sponsorship money on the condition of naming the cricket ground/portion of the stadium in their names - means of revenue generation adopted by the assessee are purely commercial activity which are not authorized by the rules of the Association - HELD THAT:- The grants received by the assessee from BCCI represents sharing of advertisement income and is in the nature of income received by the activity of the assessee. According to the AO, the assessee is a full-fledged member of the BCCI and as per the Memorandum of Association the subsidy received by the assessee is not a voluntary contribution. According to AO, the sponsorship received in respect of corporate boxes cannot constitute charity. Further, the conduct of the matches of Celebrity Cricket League Matches are in the nature of business and hit by the provisions of section 2(15) - IPL matches conducted by the assessee are purely on commercial basis. Even though the AO while denying the claim of exemption u/s 11 has given various observations as to why the assessee is not entitled to the exemption, we find the learned CIT (A), in a very cryptic order, has directed the AO to allow the exemption u/s 11 of the Act, merely on the basis of Registration u/s 12AA available to the assessee. A perusal of the order of the learned CIT (A), which have already been reproduced in the preceding paragraph shows that the CIT (A) has not addressed the various observations made by the Assessing Officer while denying the claim of exemption u/s 11. A perusal of the same would show that the Tribunal has categorically held that the receipt of income from activities are subject matter of assessment and has nothing to do with the genuineness of the activities or the activities not in conformity with the objects of the Trust - CIT (A) without properly understanding the directions of the Tribunal while granting registration u/s 12AA of the Act was carried away by the arguments advanced by the assessee and has directed the AO to allow exemption u/s 11 of the I.T.Act, which, in our opinion, is not correct. We, therefore, deem it proper to restore the issue to the file of the learned CIT (A) with a direction to decide the issue afresh after giving due opportunity of being heard to the assessee and pass a speaking order on this issue. Since the issue of exemption u/s 11 is restored to the file of the CIT (A) for fresh adjudication, the issue relating to disallowance u/s 40A(3) is also restored to his file for fresh adjudication. The grounds raised by the Revenue are accordingly allowed for statistical purposes.
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