TMI Blog2018 (9) TMI 1311X X X X Extracts X X X X X X X X Extracts X X X X ..... UDICIAL MEMBER For The Department : Shri Raghunath, Sr.DR For The Assessee : Ms. Renu Sahgal, Adv ORDER PER R. K. PANDA, AM : This appeal filed by the Revenue is directed against the order dated 05.11.2015 of the CIT(A)- 40, New Delhi relating to assessment year 2010-11. 2. Facts of the case, in brief, are that the assessee is an Association of Person (AOP) and filed its return of income on 30.09.2010 declaring Nil income. The main objects for which the association was established are as under :- ( i) To encourage and promote the game of Cricket in the province of Delhi and District of Karnal, Meerut, Aligarh, Bulandshahr, Gurgaon and for amongst the other purposes organize and run club and to take over the assets and liabilities of the Association. ( ii) To layout any ground for playing the game of Cricket and for other purposes of the Association and to provide pavilion, refreshment rooms and other conveniences in connection therewith and with a view purchase, lease or otherwise acquire land at such price or rent and for such period and condition as may seem expedient. ( iii) To finance and assist in financing of teams. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. The assessee is involved in the promotion of cricket games and sports and as such it is a charitable work and the assessee is eligible for exemption u/s 11(1). The case of the sports and its promotion comes under the definition of charitable purposes within the meaning of Section 11(1) and it is apparent that the provisions of the Proviso of Section 2(15) is not attracted. The mere fact that the assessee receives sponsorship fees and the telecasting rights fees does not mean that the assessee is involved in any trade, commerce or business activity. 4.8 The case laws of the assessee relied on by the assessee is also applicable. It is seen that in the case of Hamsadhwani Vs. DIT (E) (2012) 19 Taxmann.com 10 ITAT Chennai, the assessee was promoting music in Tamil Nadu for which it was receiving sponsorship and coaching fees and the Hon'ble Tribunal did not accept the argument and the exemption was allowed. 4.9 It may not be out of place to mention that the word charitable purposes is not defined in the I.T. Act, 1961 and only an inclusive definition has been provided in Section 2(15) and as per the present statute, it is apparent that any activity for pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. 9. We have considered the rival arguments made by both the sides and perused the orders of the authorities below. We find the Assessing Officer following his order for assessment year 2009-10 denied the benefit of exemption u/s 11 and 12 on the ground that the activities of the assessee are commercial in nature and proviso to section 2(15) are attracted. Further, the registration u/s 12A has been withdrawn by the DIT (Exemptions), Delhi. We find the ld. CIT(A) allowed the claim of exemption u/s 11 and 12, the reasons of which are already reproduced in the preceding paragraph. We find identical issue had come up before the Tribunal in assessee s own case in the immediately preceding assessment year. We find the Tribunal in ITA No.5809/Del/2014 order dated 23.06.2017 for assessment year 2009-10 has passed an elaborate order and the appeal filed by the Revenue was dismissed. The relevant observations of the Tribunal from para 6 onwards read as under :- 6. We have heard the rival submissions and also perused the relevant finding given in the impugned order as well as order of the Tribunal as relied upon by the Learned Counsel. From the perusal of the assessment order, it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d predominant object and activity of the assessee is to promote, regulate and control the game of cricket in and around Delhi. The undisputed fact is that over the years this activity has been recognized by the Income Tax Dept. as a charitable activity and registration u/s 12A was granted to the assessee. A number of assessment orders u/s 143(3) were passed, wherein the assessee was held as eligible for exemption u/s 11/12 of the Act. Hence this fact of the assessee being a charitable institution is not in dispute. 10.8. The core activity of the assessee is undisputedly, charitable in nature. Hence it is not the case of the Revenue that the assessee is carrying on trade, commerce or business under the garb of the activity being general public utility. As regards the various receipts of the assessee, we find that in the case of Tamil Nadu Cricket Association, the receipts were from: 1. Subscription 2. Renting for hiring cricket ground rooms and premises 3. Fee for providing services for IPL 4. Income from advertisement 5. Subsidy from BCCI 6. Sale of tickets for conducting the matches and 7. Restaurant and catering income. Such receipts o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... activity done by assessee, would tantamount to business activity or not. This has to be viewed, from view point of the assessee. The other person with whom the assessee has an agreement, may have its own object and reason for doing transaction and accordingly, the nature of transaction and the resultant activity would be determined in the other persons hands. However, that by itself, should not have any bearing at all on the nature of the transaction, as well as resultant activity in the hands of assessee. To carry out a transaction in an organized manner and to ensure that the transaction would help the assessee in achieving its charitable object, it is imperative that the terms and conditions of the transactions are clearly defined, to avoid any confusion or chaos. It will be further good, if these terms and conditions are reproduced in writing, in the form of an agreement. Merely because an activity is performed in an organized manner, that alone will not make these activities as business/commercial activity. Profit motive is one essential ingredient, which is apparently missing in this case. In carrying out an activity, one may earn profit, or one may incur loss. But for making ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11.5. Hence to meet global standards these facilities are required and these are not independent of the activity of providing food and refreshments to Members and Associated Persons. Running of a canteen is an incidental and necessary activity as is in every organization. This cannot be termed as business activity. It is part and parcel of the charitable activity and the receipt in question cannot be termed as exempt from activity which is in the nature of trade, commerce or business . 11.6. On advertising and contractual receipts the same explanation as was given by the assessee, as in the case of sponsorship money. Consistent with the view expressed by us, when we were dealing with sponsorship money, we hold that these contractual receipts go to reduce part of the cost incurred by the assessee for its charitable activity and hence cannot be termed as business or that the assessee has undertaken activity in the nature of trade, commerce or business . 11.7. On receipts from IPCL an elaborate explanation was given, the pith and substance is that expenditure has to be incurred by the DDCA on various items, as coordination has to be done and the aggregate of expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In none of the cases there is any quid pro quo. The ultimate beneficiary is either the cricketer or the game of the cricket. 5. The assessee is not charging any fees or revenue from the cricketer who is ultimate beneficiary. Thus, there is no quid pro quo relationship with the cricketer. The assessee is promoting cricket on charitable basis as far as real beneficiary is concerned. 6. Whenever the revenue is earned these are not earned on commercial lines and these are earned without any commercial attributes. The revenue is generated for recovering the cost, at least partly if not fully. 7. The assessee has not entered any transaction with any person on profit motive. The other person may be an entrepreneur or may be doing business but the assessee has entered the transaction only for the sole and dedicated purpose i.e. for the promotion of cricket. 8. These facts are worth noting that (a) the assessee has not diverted its funds for any purpose other than promotion of cricket; (b) the assessee has not done any activity or transaction with profit motive, (c) the assess has not done any activity beyond and outside its objects and (d) there is no change in fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E) u/s 12AA(3) r.w.s. 12 of the Act, as it is bad in law. 7. On a plain reading of the aforesaid decision and conclusion of the Tribunal, we find that the Tribunal has addressed exactly similar kinds of objections raised by the revenue before us and after dealing with each and every issue Tribunal has come to conclusion that the assessee is not carrying out any business activities and none of its receipts can be termed as an activity in the nature of trade, commerce and business . Once such finding of fact has been given on similar set of facts, then we do not find any reason to deviate from such a finding in assessee s own case, therefore, following the aforesaid decision we reject the grounds raised by the revenue and uphold the order of the Learned CIT (Appeals) for restoring the exemption u/s 11(1) to the assessee for the A.Y. 2009-10. 8. In the result, the appeal of the revenue is dismissed. 10. Since the Assessing Officer following his order for assessment year 2009-10 has denied the benefit of section 11 and 12 of the assessee and since the order for assessment year 2009-10 has already been decided in favour of the assessee by the Tribunal, therefore, in a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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