TMI Blog2015 (8) TMI 761X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment years 2009-10 and 2010-11, the claim of the assessee was rejected by the lower authorities on the ground that the registration under Section 12AA was cancelled and it was confirmed by this Tribunal. The lower authorities have also found that the assessee is engaged in business activity. As regards the cancellation of registration, now the Madras High Court has set aside the order of this Tribunal and restored the registration under Section 12AA of the Act. Therefore, as on today, the registration under Section 12AA is restored. - Decided in favour of assessee. Whether the activity of conducting oneday matches, T-20 matches and Indian Premier League matches would amount to doing business or trade? - Held that:- 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 expenditure, being the host. Therefore, this Tribunal is of the considered opinion that at any stretch of imagination, it cannot be said that the assessee is conducting any bus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee-society is a member of the national body, Board of Control for Cricket in India (BCCI), which regulates and promotes the sport of cricket in India. In turn, BCCI is the member of the International Cricket Council (ICC). According to the Ld. representative, other cricket associations / societies are also members of BCCI. 4. The Ld. representative for the assessee further submitted that BCCI holds test matches with visiting foreign teams and oneday international matches. Various cricket associations in State which play matches in their respective stadium. The inter-state and inter-zone tournaments such as Ranji Trophy, Duleep Trophy, Irani Trophy, etc. are organized by BCCI. However, the same was conducted by the State Cricket Association like assessee. The Ld. representative further submitted that BCCI also organizes twenty over cricket matches between various franchisees which is otherwise known as Indian Premier League. The franchisees conduct the matches in the stadia belonging to the State Cricket Associations / societies. According to the Ld. representative, the assessee, being a State Cricket Association, is entitled to revenue on sale of tickets when it conduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15) of the Act, the Ld. representative submitted that with effect from 01.04.1984, charitable purpose includes relief of poor, education, medical relief and advancement of any other object of general public utility. Referring to the circular issued by the CBDT in Circular No.395 dated 24.09.1984, the Ld. representative submitted that promoting sport was considered to be a charitable purpose by the CBDT. According to the Ld. representative, advancement of any object beneficial to general public or a section of public as distinguished from an individual or group of individuals would be an object of general public utility. Accordingly, the CBDT found that promotion of sports and games would amount to advancement of an object beneficial to public. Therefore, the assessee-society has to be treated as charitable institution. In fact, according to the Ld. representative, the registration granted to the assessee-society under Section 12AA of the Act was cancelled by the Director of Income Tax (Exemptions) by an order dated 29.12.2011, a copy of which is available at page 197 of the paper-book. The assessee challenged the correctness of the order of the Director of Income Tax (Exemptions) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer found that the activity of the assessee-society falls within the purview of business. Referring to Indian Premier League, the Ld. representative submitted that the Assessing Officer estimated the television audience more than 200 millions in India and Indian Premier League match has a global reach in respect of the advertisement pertaining to new production launch. Therefore, the Assessing Officer found that it is a commercial venture. According to the Ld. representative, the Assessing Officer placed his reliance on the order of this Tribunal confirming the cancellation of registration under Section 12AA of the Act. The Assessing Officer had no benefit of going through the judgment of the High Court which reverses the order of the Tribunal. According to the Ld. representative, cricket is admittedly one of the recognized sports in India. Therefore, the assessee is eligible for exemption under Section 11 of the Act. 7. The Ld. representative further submitted that it is nobody s case that the funds were diverted for any other purpose other than promoting the sports. No individual is benefiting out of the funds of the assessee-society. The entire funds generated in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and Indian Premier League matches. According to the Ld. D.R., the share received by the assessee from BCCI in the form of subsidy / grant is nothing but a share of profit collected from BCCI from advertisements. BCCI in fact earns huge money on account of phenomenal advertisement. Though the assessee claims it to be a TV subsidy, it is obviously a misnomer. According to the Ld. D.R., the assessee is not eligible for deduction under Section 11 of the Act in view of proviso to Section 2(15) of the Act. 10. Referring to the order of the Assessing Officer for the assessment year 2008-09, the Ld. D.R. submitted that in fact the Assessing Officer allowed exemption under Section 11 of the Act. What was disallowed was only depreciation claimed by the assessee. According to the Ld. D.R., the assessee in one hand is claiming as application of income while purchasing the asset and on the very asset, the assessee is claiming depreciation. According to the Ld. D.R., once the cost of the capital asset was allowed as application of income under Section 11 of the Act, the cost of the said asset becomes NIL. Therefore, there is no question of allowing any depreciation. According to the Ld. D. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the 1st day of April, 1999, and is put to use before the 1st day of April, 1999, for the purposes of business or profession, the deduction in respect of such asset shall be allowed on such percentage on the written down value thereof as may be prescribed. Explanation - For the purposes of this proviso,-- (a) the expression commercial vehicle means heavy goods vehicle , heavy passenger motor vehicle , light motor vehicle , medium goods vehicle and medium passenger motor vehicle but does not include maxi cab , motor-cab , tractor and road-roller ; (b) the expressions heavy goods vehicle , heavy passenger motor vehicle , light motor vehicle , medium goods vehicle , medium passenger motor vehicle , maxi-cab , motor-cab , tractor and road-roller shall have the meanings respectively as assigned to them in section 2 of the Motor Vehicles Act, 1988 (59 of 1988). Provided also that, in respect of the previous year relevant to the assessment year commencing on the 1st day of April, 1991, the deduction in relation to any block of assets under this clause shall, in the case of a company, be restricted to seventy-five per cent. of the amount calculated at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his sub-section, the expression know-how means any industrial information or technique likely to assist in the manufacture or processing of goods or in the working of a mine, oil-well or other sources of mineral deposits (including searching for discovery or testing of deposits for the winning of access thereto) ; Explanation - 5. For the removal of doubts, it is hereby declared that the provisions of this sub-section shall apply whether or not the assessee has claimed the deduction in respect of depreciation in computing his total income ; (iia) in the case of any new machinery or plant (other than ships and aircraft), which has been acquired and installed after the 31st day of March, 2005, by an assessee engaged in the business of manufacture or production of any article or thing, a further sum equal to twenty per cent. of the actual cost of such machinery or plant shall be allowed as deduction under clause (ii) : Provided that no deduction shall be allowed in respect of-(A) any machinery or plant which, before its installation by the assessee, was used either within or outside India by any other person ; or(B) any machinery or plant installed in any office premises or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king institution as referred to in sub-section (15) of section 45 of the said Act, sanctioned and brought into force by the Central Government under sub-section (7) of section 45 of that Act, of any asset by the banking company to the banking institution. (2) Where, in the assessment of the assessee, full effect cannot be given to any allowance under sub-section (1) in any previous year, owing to there being no profits or gains chargeable for that previous year, or owing to the profits or gains chargeable being less than the allowance, then, subject to the provisions of sub-section (2) of section 72 and sub-section (3) of section 73, the allowance or the part of the allowance to which effect has not been given, as the case may be, shall be added to the amount of the allowance for depreciation for the following previous year and deemed to be part of that allowance, or if there is no such allowance for that previous year, be deemed to be the allowance for that previous year, and so on for the succeeding previous years. In view of Section 32 of the Act, depreciation has to be allowed only in respect of an asset owned by the assessee and used for the purpose of business or profes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erence in sub-section (a) is invariably to income and not to total income . The expression total income has been specifically defined in section 2(45) of the Act as the total amount of income . . . computed in the manner laid down in this Act . It would accordingly be incorrect to assign to the word income used in section 11(1)(a), the same meaning as has been specifically assigned to the expression total income vide section 2(45). 3. In the case of a business undertaking held under trust, its income will be the income as shown in the accounts of the undertaking. Under section 11(4), any income of the business undertaking determined by the Income-tax Officer in accordance with the provisions of the Act, which is in excess of the income as shown in its accounts, is to be deemed to have been applied to purposes other than charitable or religious, and hence it will be charged to tax under sub-section (3). As only the income disclosed by the account will be eligible for exemption under section 11(1), the permitted accumulation of 25 per cent will also be calculated with reference to this income. 4. Where the trust derives income from house property, interest on securi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed or assessable. Respectfully following the decision of the Hon ble Kerala High Court and taking cue from the decision of the Hon ble Calcutta High Court, we do not find any hesitation to confirm the order of the Ld. CIT(A) and also the views expressed by him in his order. Accordingly this appeal is held in favour of the Revenue. 12. Apart from that, when the assessee claims the cost of the capital expenditure as exemption under Section 11 of the Act, then the cost of the capital asset becomes NIL. Admittedly, depreciation under Section 32 of the Act has to be allowed only on written down value of the asset. When the written down value of the asset becomes NIL since the entire cost was allowed as application of income under Section 11 of the Act, this Tribunal is of the considered opinion that there cannot be any further claim for deduction under Section 32 of the Act. In view of the above, this Tribunal is of the considered opinion that the assessee is not eligible for deduction under Section 32 of the Act towards depreciation. However, it is made clear that the assessee is eligible for exemption under Section 11 of the Act for all the assessment years under consideration. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n any activity in the nature of trade, commerce or business or its activity would amount to rendering any service in relation to trade, commerce or business. We have carefully gone through the object of the assessee-society, a copy of which is available at pages 62 to 65 of the paper-book. For the purpose of convenience, we are reproducing the object:- (a) To take over on registration under the Societies Registration Act XXI of 1860 and assume the affairs and activities of the Madras Cricket Association, as subsequently appellated as Tamil Nadu Cricket Association and continue and take over the dues to and assets, liabilities, commitments and undertakings of the said Madras Cricket Association. (b) To maintain a general control of the game of cricket in the State and the Union Territory of Pondicherry and give Its decision on all matters concerning the same either when referred to or suo moto. The activities would be confined to India. (c) To spread the game throughout the State by organizing tournaments, including Inter-University, Inter-School and Inter-Association matches, to educate youn sportsmen in the game generally and also in the field of physical culture and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of citizen through the medium of sports in general and cricket in particular. (j) To impart physical education through the medium of cricket and take all steps to assist the citizens to develop their physique and have a healthy mind and healthy body. (k) To spread the ideals of cricket and all that it stands for throughout the length and breadth of its area 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 India and other countries. (l) . . .. .. .. .. .. .. .. . time to run such matches for the achievement of the objects of the Association and to utilize the net proceeds thereof towards the implementation of the objects set out herein and to educat the public, the school boys, college students, clubs and cricketers, in cricket and all the ideals it stands for. (m) To have as many classes of members with such rights as the General Body decide. (n) To instill keenness for the game and to foster the spirit of sportsmanship in promising students of schools and colleges and members of affiliated Clubs / Dist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted directly or indirectly to enhance the value of or render more profitable any of the objects, rights or properties of the Association. (y) To maintain a panel of approved cricket umpires and to do such acts as may be necessary for this purpose including holding of prescribed periodical tests with a view to enable them to qualify themselves as first class umpires. (z) To add, delete, alter, maintain and enforce rules and regulations for the control and governance of the game in the State of Tamil Nadu and the union Territory of Pondicherry and to maintain discipline amongst players, officials, clubs and affiliated institutions. The object of the assessee-society is to control game of cricket in the State of Tamil Nadu and in the Union Territory of Puducherry and also to organize tournaments, including inter-university, interschool and inter-association matches, to educate young sportsmen in the game generally and also in the field of physical culture and the spirit of sportsmanship. Therefore, the sole object of the assessee-society is to promote sport of cricket in the State of Tamil Nadu and in the Union Territory of Puducherry. 15. Now, let s examine whether the ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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