TMI Blog2019 (1) TMI 1522X X X X Extracts X X X X X X X X Extracts X X X X ..... ll along accepted by the CBDT itself, an object of general public utility. Cricket is indeed an immensely popular game in this part of the world, and anything to do with cricket results in mass involvement of public at large. The sheer strength of these numbers results in higher visibility of cricketing activities and the scale of operations on which the work for development of cricket is to be carried out. These facts, by itself, and without the assessee before us deviating from their objects or venturing into trade, commerce or business, cannot require the activities to be treated as commercial activities. When a cricket stadium is to be built, it has to accommodate a very large number of persons but the size of the stadium would not mean that the activity is for anything other than promotion of cricket.. When the numbers are large, the scale of operations is large, and when scale of operations are larger, even the surplus or deficit could be large, but then the scale of operations may be a scale on which commercial activities could be carried out but that fact cannot convert an object of general public utility into a commercial activity. As analysed the annual reports and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e have decided the main grievance of the assessee, as set out in ground no. 3 (a), we see no need to adjudicate on the alternative plea set out in ground 3 (b). That aspect of the matter is rendered academic and does not call for any adjudication as on now. Infrastructure subsidy received - capital or revenue receipt - Held that:- As long as the subsidy is relatable to a capital asset created by the assessee on his own or by an eligible district cricket association, as the present subsidy undisputedly is, it is outside the ambit of revenue receipt and taxable income. The very foundation of the stand of the Assessing Officer is thus devoid of legally sustainable merits. As such, there can hardly be an occasion, in principle, to hold such a subsidy as a revenue receipt or taxable income. There is not even a whisper of a discussion by the Assessing Officer to the effect that infrastructure subsidy is revenue in nature. As a matter of fact, the claim is made for the subsidy only after the expenditure having been incurred. The authorities below have simply brushed aside the case and the submissions of the assessee and proceeded to hold it as an income. Looking to the nature of the su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l relief, and the advancement of any other object of general public utility . The proviso to this sub section, inserted with effect from 1st April 2009, states as follows: Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for acess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity 4. There have been several subsequent amendments to this statutory provision but those amendments do not have much bearing on the issue before us. Suffice to note that in plain words, all that this legislative amendment provided for was that in a situation in which, in the course of advancement of any other object of public utility , the activities of an institution involved carrying on of any activity in the nature of trade, commerce or business or of any activity of rendering any service in relationship to any trade, commerce or business for acess, fee or any other co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntain a panel of approved Umpires who qualify themselves by passing the prescribed tests for purpose of officiating as such in the matches conducted by the Association. 5. To select teams to represent the Association in any tournaments, championship or fixture local or otherwise. 6. To arrange, supervise, hold, encourage and finance visits of teams. 7. To arrange, and/or manage among other things league and/or any other tournaments. 8. To promote and hold either alone or jointly with any other Association. Club or persons, sports, meetings, competitions and matches and to offer, give or distribute towards prizes, medals and awards. 9. To make provision for coaching deserving persons in the various departments of the game in general and cricket in particular. 10. To impart physical education through the medium of Cricket and take all steps to assist to the citizens to develop their physique. 11. To organise matches in aid of public charities and Relief Funds. 12. To lay out such ground or grounds for playing the game and for other purposes and to provide pavilion, stadiums, other conveniences and amenities in connection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and income thereof and the proceeds of the sale or mortgage thereof, for or towards, ail or any of the objects of the Board. 27. To start, assist, encourage or promote for training Cricketers and to provide for such amenities and facilities, usually provided in boarding schools. 28. To appoint Committee or Committees from time to time to organise matches for the achievement of the objects of the association and to utilise the net proceeds thereof towards the implementation of these objects. 29. To purchase, repair, make, supply, take on lease, hire or otherwise acquire any movable and/or immovable property, rights or privileges necessary or convenient for the purpose of carrying out the objects of the Association on such terms and conditions as the Managing Committee may at its discretion deem fit. 30. To sell, mortgage, exchange, lease, dispose of or otherwise deal with, all or any part of the property or funds of the Association it may at its discretion deem fit. 31. To borrow, whenever necessary by and mode with or without security, with or without interest and to purchase, redeem or pay off any such securities. 32. To employ, app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of the objects of the Association. ( k) To invest moneys and funds of the Association in such manner as may be decided upon from time to time. ( l) To train umpires and to form a panel of umpires. ( m) To collect all the cricket statistics of different players and clubs so as to give guidance in the selection of players for important matches. ( n) To do any other acts in furtherance of the above objects not inconsistent there with. 8. The position for Saurashtra Cricket Association is no different. As a matter of fact, the CIT(A) has simply followed his order for Gujarat Cricket Association in this case. Be that as it may, for a ready reference, the objects of the Saurashtra Cricket Association are also reproduced below: The objects of the Association are : ( a) To control the game of cricket in Saurashtra and Kutch and give its decision on all matters which may be referred to it by any District Cricket Association affiliated to Saurashtra Cricket Association. ( b) To encourage the formation of District Cricket Associations and the organisation of inter - district and other tournaments. ( c) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecessary to co-ordinate the activities of affiliated Associations, institutions and their Members in relation to the Association and amongst themselves. ( o) To select teams to represent Saurashtra in Ranji Matches played in Saurashtra and Kutch and other States and to select such other teams as the Association may decide from time to time. ( p) To start and maintain a library of books, periodicals and museum on Sports in general and cricket in particular and to start journal or Journals on cricket. ( q) Generally to do all such other acts and things as may seem to the Association to be convenient and/or conducive to the carrying out of the objects of the Association. 9. The assessee is also providing education for cricketers by providing for, as noted in the assessment order, school teams, district level teams, players of all age groups, for learning the intricacies of cricket, by playing the matches and running a coaching academy for teaching finer aspects of game to the budding cricketers . The stand of the revenue authorities, relying upon the CBDT circular No. 395 [F. No. 181(5) 82/IT(A-I)], dated 24-9-1984, is that the assessee, being a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visaged by various Courts. Further, the assessee has submitted that cricket is a subject as per the curriculum of the State of Gujarat. The submission of the assessee is not acceptable since it is under subject of physical education and it is not of scholastic instruction. Therefore, the submission of the assessee that it imparts education is not acceptable since the very essence of education is absent in the activity of the assessee. 10. The Assessing Officer also noted that the assessee has mainly earned income from the sale of advertising and ticket sales- a fact that clearly demonstrates that main income of the assessee is from entertainment of public by arranging national and international matches for a fee. The income generating activity, as is the stand of the Assessing Officer, is holding cricket matches. It was noted, for example for the assessment year 2012-13, that while the assessee has total income of ₹ 20,24,81,544, it includes income of ₹ 12,20,19,916 from hosting the cricket matches and income of ₹ 8,04,61,628 from other sources. The details of the income were stated to be as follows: The assessee is admittedly involved in promotion of cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd are hence distinguishable . 11. The Assessing Officer has also referred to, and relied upon, Hon ble Calcutta High Court s judgment in the case of Cricket Association of Bengal Vs CIT [(1959) 37 ITR 277 (Cal)] in support of the proposition that a club formed for the development and promotion of cricket cannot be treated as a charitable institution. A reference was then also made to a decision of Chennai Bench of the Tribunal in the case of Tamilnadu Cricket Association Vs DIT Exemptions [(2013) 32 taxmann.com 50 (Chennai)]. A reference was also made to the decision of Panaji bench of this Tribunal in the case of Entertainment Society of Goa Vs CIT [(2013) 43 taxmann.com 210 (Panaji) . The Assessing Officer thus, so far as assessment year 2012-13 in the hands of Gujarat Cricket Association is concerned, as follows: In view of the above facts and the legal provisions, the assessee is held to be carrying on the activity of advancement of other objects of general public utility and which is in the nature of business, trade and commerce and not in the nature of education as claimed by the assessee. Therefore the assessee is covered by the provisions of Section 2(15) read ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owever, the phrase that not involving 'the carrying on any activity for profit' was omitted by Finance Act, 1983 with effect from 1/4/1984, but with this, restrictions was imposed on business activities by way of introducing Section-11 (4A) of the Act at the same time. 6.3 Earlier u/s.10 of the Act income of certain bodies/organizations/ authorities/instrumentalities of the State such as Urban Development Authorities, Housing Board, Institutions/Organisations controlling/ supervising/regulating/ encouraging games of cricket, hockey etc., Coffee Board, Tea Board, research associations, news agency, SAARC Fund, securitisation trust etc. were given blanket exemption from the taxable income. As can be seen from variety of organisations and sectors covered, the consideration for such exemption u/s 10 of the Act had never been that these institutions are undertaking charitable activities. 6.4 The major change in the law came through Finance Act, 2002, w.e.f. 1/4/2003. Vide this Act the provision of Sec.10(20), 10(20A), 10(23), 10(29) underwent major change. Sec. 10(20A), 10(23) and 10(29) were omitted by Finance Act, 2002. Prior to omission Sec-10(23) was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment Board as defined in section 3 of the Cantonments Act, 1924 (2 of 1924) . 6.7 By means of introducing an exhaustive definition of local authority, which was hitherto not there, the Parliament denied exemption to any other Authority beyond those mentioned in Explanation. 6.8 By these amendments the law makers categorically derecognized the principle that associations like GCA, should enjoy blanket exemption. GCA will have to stand to the test of the Income Tax Act and especially of section 2(15) of the Act. Hence, legislative intent was clear that such authorities were not to get indirect support of the Government through tax exemption route. Such de-recognition of the principle in respect of said institutions could be because of reasons such as need for higher revenue etc. over the indirect support like tax exemption. 6.9 At the same time, as earlier blanket exemption u/s.10(23) does not make these institutions or associations as entities undertaking activities for charitable purposes nor does omission of sec. 10(23) prohibit them in getting registered u/s. 11/12 of the Act as per the laid down procedure under the said sections. Though, it was never prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als and no other clause. 6.10 The Parliament intervened again and introduced proviso to sec-2(15) by Finance Act, 2008 w.e.f. 1/4/2009. The first proviso reads as follows:- Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity. (Emphasis supplied) 6.11 Further, the Parliament added the second proviso vide Finance Act, 2010, with retrospective effect from, 1/4/2009 which stated that first proviso shall not apply if the receipts from such activities, did not exceed ₹ 10 lakhs in the previous year. The Parliament, vide Finance Act, 2011, decided to revise this threshold in the second proviso to section 2(15) from ₹ 10 lakhs to ₹ 25 lakhs w.e.f. 01/04/2012. 6.12 The Parliament made its intention further clear and obvious by amending the IT Act vide Finance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e not concerned to look into how an institution has used, applied or retained its income, if the said has been received by the institution from any activity carried out in the nature of trade, commerce or business or from any activity of rendering any service in relation to trade, commerce or business. The words used in the proviso are carrying on of any activity in the nature of trade, commerce or business not the words 'carrying on trade, commerce or business'. Using of the words 'any activity in the nature of prior to trade, commerce or business' in our opinion has a specific meaning while interpreting the proviso. These words cannot be ignored. This provision mandates that the institution need not actually be carrying on trade, commerce or business but the activity carried on by him is similar to trade, commerce or business. The profit motive is required while an institution is carrying on trade, commerce or business. The use of words carrying on of any activity in the nature of trade, commerce or business in our opinion will mean that there need not be profit motive in carrying on the activity by the institution..... The legislature is fully aware of that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. The newly inserted proviso to section 2 (15) will apply only to entities whose purpose is ' advancement of any other object of general public utility' i.e. the fourth limb of the definition of 'charitable purpose contained in section 2 (15). Hence, such entities will not be eligible for exemption under section 11 or under section 10 (23C) of the Act if they carry on commercial activities. Whether such an entity is carrying on any activity in the nature of trade, commerce or business is a question of fact which will be decided based on the nature, scope, extent and frequency of the activity. 3.1 ......... 3.2 In the final analysis, however, whether the assesses has for its object 'the advancement of any other object of general public utility' is a question of fact. If such assessee is engaged in any activity in the nature of trade, commerce or business or renders any service in relation to trade, commerce or business, it would not be entitled to claim that its object is charitable purpose, in such a case, the object of 'general public utility' will be only a mask or a device to hide the true purpose which is trade, commerce or busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings of BCCI before the AO of BCCI referred in the order were available with the appellant. Secondly the appellant itself had submitted the minutes of AGMs of BCCI during the appellate proceedings of the appellant for AY 2011-12. Thirdly the Annual reports of the BCCI are public documents and are available on its website. In short all the document referred herein under were available with the appellant. Especially during the appellate proceedings for AY 2011-12. 9.2 BCCI: The main object of the BCCI is (a) to control the game of cricket in India and give its decision on all matters including women cricket which may be referred to it by any member association in India; (b) To encourage the formation of state, regional other cricket association and the organisation of Inter-sate and other tournaments etc. 9.3 The working committee is the committee to whom the management of the affairs of the Board is entrusted with. There are three kinds of members of BCCI:- (a) Full Members (b) Associate Members and (c) Affiliated members. Every full member and chairman of meeting has one vote. The associated member or affiliated member have no vote but are eligible to at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounting to ₹ 466 crores. The IPL contributed ₹ 662 crores to its income. The treasurer has mentioned under the heading T.V Subvention that there is a remarkable increase in the payment of T.V Subsidy. IPL subvention, Infrastructure Subsidy through members association from ₹ 456 crores to ₹ 624 crores on which BCCI-IPL had also contributed in distribution of ₹ 202 crores as IPL Subvention during the year 2008-09 which is about 37% increase over the last year. The annual report also throws light on the Indian Premier League which has been emerged as cricket as most valuable property and the 6th more powerful property in the world as per the study conducted by the International renowned SPORTSPRO magazine. It is mentioned in the annual report that the IPL, the vision of BCCI Jt. President Lalit Modi has only been in existence for two tournaments but has already revolutionized cricket. The Broadcast rights were sold for $1.026 billion equivalent to $1.71 million per game. Title sponsorship rights were sold for $50 million over five years. Annual Report 2009-10 9.6.3 The treasurer has mentioned that the overall income of BCCI excluding IPL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... based on the communication of DIT(E), Mumbai, has not granted benefit of section 11 12 of the Act to BCCI. The stand taken by BCCI during its assessment proceedings is mentioned below. The BCCI vide its submission dated 03/12/2012 to the AO has explained its relationship with State Cricket Association as follows:- 1. BCCI is society registered under the Tamil Nadu Societies Registration Act. It was formed in the year 1929 with the object of promotion and development of cricket in India and is a member of the International Cricket Council (ICC) the regulatory body for world cricket. As a member of ICC, BCCI represents India in bilateral tours between member countries and in ICC tournaments such as the World Cup. 2. BCCI has 30 members out of whom 25 are state cricket associations, 2 are private clubs and 3 are Central Government Institutions. BCCI does not own or manage the infrastructure and facilities that are required for cricket. It encourages and oversees the various state associations to promote the game, build the required infrastructure organize tournaments, leagues, coaching camps etc. in their respective states. Whenever a foreign team visits India, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs and officials, tour fee, match fee, etc are met by BCCI and revenues from sponsorship belong to BCCI. In respect of revenues from sale of media rights, an arrangement has evolved over time. Until 1991-92 the income from media rights was meager. With the growth in income from media rights, it became necessary to optimize the arrangement for sale of media rights. For a Test series or ODI series conducted in multiple centers and organised by BCCI and multiple state associations, it was found that if each state association were to negotiate the sale of rights to events in its centre, its negotiating strength would be low. It was, therefore, agreed that BCCI would negotiate the sale of media rights for the entire country to optimize the income under this head. It was further decided that out of the receipts from the sale of media rights 70% of the gross revenue less production cost would belong to the state associations. Every year, BCCI has paid out exactly 70% of its receipts from media rights (less- production cost) to the state associations. This amount has been utilized by the respective associations to build infrastructure and promote cricket, making the game more popular, nurt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate associations, who meet the expenditure on the matches such as security for players and spectators temporary stands, operation of floodlights, Score Boards, management of crowd, insurance for the match, electricity charges, catering etc. Whereas with regard to the income from sale of media rights, the arrangement between BCCI and the State Associations has been that 70% of the revenue would belong to the State Associations. As shown, this has been the arrangement between the parties for the twenty years. The State Associations are entitled by virtue of established practice to 70% of the media right fee. It is in expectation of this revenue that the various state associations take an active part and cooperate in the conduct of the matches. This payment is therefore made only with a view to earn the income from media rights. These payments do not represent distribution of profits to members, since the payment is at a percentage of the gross revenues and had been paid even in those years where BCCI had incurred a loss: besides, the amount was not paid to all members but only to the state associations. In other words, the payment is not made to the three private clubs or the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the above, this is nothing but distribution of profit to its members and in the absence of control mechanism and financial control the money given to State Association as infrastructure subsidy, TV Subvention and subsidy/staging subsidy cannot allowed to the assessee. 13.14 Further infrastructure subsidy to State Association, TV Subvention and as subsidy/staging subsidy given by the assessee is not actually spent by the assessee it has simply been given to state Association, as such these are not allowable herewith as expenditure which is incurred wholly and exclusively for business purposes. Even if the exemption would have granted by any Authority to the assessee, the T. V. Subvention and subsidy/staging subsidy given to the Member Association cannot be allowed as application as the same is given as subsidy to associations and not spent by assessee for its objects. 9.7.5 With regard to launching of IPL and allowing private entities to share revenue the A.O has observed as follows :- The BCCI has entered into this venture simply to earn profit. Promotion of cricket is no where concern of the BCCI. BCCI is already cash surplus. Therefore it cannot b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hony. Treasurer had informed the AGM that henceforth the accumulation can be made only for five years instead of 10 years. He informed the AGM that the Finance Committee and the Working Committee had recommended for transfer of ₹ 10 crores to the infrastructure development funds and ₹ 7 crores to Ranji Trophy funds out of the current year profits. The AGM approved all these decisions. It was the Chairman who suggested that, as already decided in the working committee, henceforth the TV Subsidies should be sent towards 'corpus funds' and this decision can also be approved by the members of this meeting. Thereafter the members unanimously approved that henceforth the TV Subsidies should be sent by the Board to the member associations towards 'Corpus Fund' instead of Subsidy Fund'. In the same AGM at item No. 12 the decision taken by the working committee on 25/08/2001 was approved unanimously. The decision was in respect of discontinuance of the policy of withholding 50% of TV Subsidy and about the decision to release 100% TV Subsidy to Members and increasing the limit for infrastructure subvention from ₹ 2 crores to ₹ 4 crores. Further t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was ₹ 307 crores. It was decided to distribute the surplus after meeting of expenses in the following manner. ₹ 10.53 crores to the associations who did not stage any international match. ₹ 33.3 crores to associations who have staged an ODI match. ₹ 14.27 crores to the association who have staged the test match. ₹ 17 crores to the association who have staged both ODI and test match. The total subsidy on account of IPL was ₹ 202 crores. Hony. Treasurer informed that in 2009 as the IPL matches were played in South Africa all the affiliated units will get the same share of ₹ 8,10,43,200/-. 9.8.5 AGM for F.Y.2009-10 The Hony. Secretary announced that TV Subsidy is distributed as follows :- All the eligible members would get equal shares of ₹ 13.09 crores each and in addition the members who staged international matches would receive additional subsidy as under :- ODI each ₹ 2.47 crores Test Match each ₹ 3.30 crores T-20 International ₹ 1.65 crores The Hony. Treasurer further announced that IPL su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me as its corpus whereas GCA has taken this amount to balance sheet but not as corpus. 9.9.2 Thus, it can be seen that within Gujarat the three Cricket associations which are full members of the BCCI have treated the TV Subsidy, the IPL Subvention and the funds received under the Infrastructure Subsidy Scheme in different ways and manners. The treatment given by other SCAs i.e. outside of Gujarat is not known. The judgment of hon'ble ITAT Chennai in the case of Tamil Nadu Cricket Association is silent on corpus issue (referred later). BCCI has also not bothered to find out whether the treatment given by the various cricket associations in their audited accounts is right or wrong. In its AGMs, BCCI have resolved again and again to send the funds under the TV Subsidy or IPL Subvention to SCAs only when the audited accounts of SCAs would reach the BCCI. So it cannot be said that BCCI was unaware that differential treatment was given by various Cricket Associations to these receipts. It can be seen from the various Annual Reports of BCCI, minutes of AGMs of BCCI as well as the submissions of BCCI in its own assessment proceedings that there has been a consistency in the sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nduct of these matches. Although the matches are allotted by BCCI, it is always on behalf of the full members of BCCI. 10.2.1 It is the full members who have decided on the Infrastructure scheme of the BCCI. The main reason for the developing the scheme is to further enable the SCAs to hold matches in their respective jurisdiction. 10.2.2 Infrastructure scheme is the scheme of BCCI that encourages its affiliated units to create infrastructure both for international and domestic cricketing activities. The scheme is of financial assistance by way of reimbursement of expenditure incurred by State Association on infrastructure development. It is a well documented scheme and the items of expenditures that are reimbursable have been listed by BCCI for the SCAs. The subsidy available under the scheme is 50% of the expenditure actually incurred. The extent to which such expenditure can be incurred has varied from year to year based on the decision of the full members of BCCI. The Infrastructure subsidy scheme is based on the principle of reimbursement of expenses up to 50% incurred by the said Cricket Association. 10.3 Various Annual Reports throw a light on how the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the sale of rights to events in its centre, its negotiating strength would be low. It was, therefore, agreed that BCCI would negotiate the sale of media rights for the entire country to optimize the income under this head. It was further decided that out of the receipts from the sale of media rights 70% of the gross revenue less production cost would belong to the state associations. Every year, BCCI has paid out exactly 70% of its receipts from media rights (less production cost) to the state associations. 10.6 It can be seen from the submissions of BCCI as mentioned above that in the process of conducting matches such as Test/ODI and including IPL the SCAs incur expenses. Further, the BCCI has also admitted that there is need to have fair and equitable sharing of revenues and the arrangements have evolved over time. The share in media rights pertains to time period and not to a particular match. The matches are never played in isolation but are always in a Test/ODI series. It is joint organisation of an event over a time by BCCI and the SCAs. BCCI has admitted that the SCAs are entitled to these revenue receipts. Further the BCCI has also admitted that it was agreed am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from sale of media rights and IPL activities belong to SCAs and not to BCCI. The consistency is on the matter that both the receipts have emerged out of combined efforts of BCCI SCAs; that both the receipts are from commercial activities and finally, that both the receipts are simply transferred to SCAs as TV subsidy and IPL subvention as their share and not as corpus. It is the SCAs who have treated them in different fashion in their own financial statements. However, this does not mean that the nature of receipt changes. 10.8 Therefore, I am of the considered opinion that receipts from BCCI on account of sale of media rights as well as the receipts from IPL activities are in the nature of revenue income of the GCA/Appellant . These receipts represent 70% of share of the net income. There is no doubt that the receipts are from the activities that are purely in the nature of trade, commerce and business or from activities of rendering any service in relation to any trade, commerce or business, for a cess or fee. 13. On materially similar lines, the appeals of the two other cricket associations before us, i.e. Baroda Cricket Association and Saurashtra Cricket Associ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the BCCI and not the local cricket associations. He hastens to add that as he is representing a local cricket association, he need not address himself to this larger issue about correctness or otherwise of even the allegations. In response to a question from the bench, learned counsel for the assessee submits that even if it is correct that the assessee is an affiliate of the BCCI, so far as taxation of income is concerned, the assessee is an independent assessment unit and the actions of the BCCI cannot vitiate the assessments of its affiliates. There is no provision under the statute which could enable the assessment of an entity being influenced by the actions or inactions of another group entity. Learned counsel then invited our attention to the nature of expenses incurred by the assessee, as noted by the Assessing Officer himself in the assessment orders. He points out that the expenses incurred are on account of local cricket tournaments, district cricket expenses for promotion of cricket in the districts assigned to the respective association, seminar, training, meeting, exhibition etc for coaches, umpires, trainers, physiotherapists, scorers and other supporting staff, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions in the case of Lok Shiksha Trust Vs CIT [(1975) 101 ITR 234 (SC)], Their Lordships have given much wider a meaning to the connotations of education , and observed that education surely would encompass systematic dissemination of knowledge and training in specialized subjects and that it is not necessary to nail down the concept of education to a particular formula or to flow it only through a defined channel; its progress lies in the acceptance of new ideas and development of appropriate means to reach them to the recipients . Learned counsel then invites our attention to the judgment of Hon ble jurisdictional High Court s judgment in the case of DIT Vs Ahmedabad Management Association [(2014) 366 ITR 85 (Guj)], on the same lines, wherein it is held that conducting continuing education diploma and certificate program, management development program, public talk, seminars and conferences etc are educational activities. It is thus contended that development of cricket is an educational activity, and, as it is an educational activity, proviso to Section 2(15) has no application in the matter. The whole case of the revenue authorities is thus ill conceived. 16. It is then ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he plea of the assessee, to hold that the proviso to Section 2(15) was not applicable on the facts of these cases. 17. Learned counsel then refers to and relies upon the judgments of Hon ble jurisdictional High Court in the cases of Ahmedabad Urban Development Authority Vs ACIT [(2017) 396 ITR 323 (Guj)] and CIT Vs Gujarat Industrial Development Corporation [(2017) 83 taxmann.com 366 (Guj)] in support of the proposition that when activities of the assessee are not in the nature of trade, commerce or business, proviso to Section 2(15) cannot be invoked. Our attention was also invited to Hon ble Punjab Haryana High Court s judgment in the case of Tribune Trist Vs CIT [(2017) 390 ITR 547 (Guj)] on the same lines and wherein a series of decisions by the coordinate benches of this Tribunal, holding that section 2(15) cannot be invoked in the cases of city improvement trusts even though there is a sale of developed plots and such other activities by these trusts. It is contended that just because the sale is on the basis of ground realities and is not subsidized it cannot be said that the assessee is in business, trade or commerce. Learned counsel further submits that merely because ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, it is engaged in (i) providing infrastructure for the game of cricket; (ii) education for cricketers for learning intricacies of game of cricket by playing matches and running a coaching academy for teaching the finer aspects of the game to the budding cricketers. Learned counsel highlights the fact that appellant carries out various activities for the sole purpose of development of the game of cricket in Gujarat. Its activities span the entire year in the conduct of cricket promotion related activities. It is pointed out that the appellant employed various coaches, doctors, physio trainers, pitch curators, renowned players and umpires for the purposes of imparting knowledge and skills to budding players, and that these coaches/ trainers are paid fees for imparting the practical aspects of the game. It is also pointed out that the assessee conducts various classes for audio visual teaching, mental toughness, yoga, motivation, fitness etc. There are various object clauses in the memorandum of association of the appellant which demonstrate that the appellant was engaged in educational activities. The appellant also conducts various matches like under 23, under 19, under 16, und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 357 ITR 265(Delhi) wherein it is said to have been held that teaching and promoting all forms of music and dance, western, Indian, and any other according to the objects of the Trust is also imparting of Education. On the strength of these arguments, it is contended that the assessee is engaged in imparting of Education and hence, the amended proviso to section 2(15) wef 1.4.2009 is not applicable to the assessee, and exemption u/s 11 of the Act may kindly be allowed. 20. Learned counsel then submits, without prejudice to his basic stand that as promoting cricket is an educational activity, proviso to Section 2(15) cannot be invoked at all, it is engaged in the activity that is to be treated as advancement of objects of general public utility . The appellant is covered within the last limb of the definition of charitable purpose under section 2(15) which include advancement of any other object of general public utility. Though promotion of games like cricket may not be advantageous to the entire mankind, the promotion of cricket is advantageous to a section of the society which plays, follows and enjoys it. This has been statutorily acknowledged by Circular No.395 dated 24.9.19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard to applicability of the aforesaid proviso in the present case are as follows: In the assessment order, it is concluded that the appellant is not a charitable organisation as per the definition of charitable purpose under section 2(15) read with provisos thereunder. The learned officer arrived at this conclusion based on the following grounds: a) During the year under consideration, the appellant received substantial Match income (which includes sale of space, ticket sale etc). The appellant is thus concluded to be engaged in the business of entertainment of public at large by arranging national and international tournaments. b) The decisions relied upon by the assessee to substantiate that activity of conducting cricket matches is not a business activity was distinguished on facts. c) Reliance has been placed on the Calcutta High Court decision in the case of Cricket Association of Bengal v CIT (1959) 37 ITR 277 (Cal) Role of the appellant In this regard, the appellant wishes to submit that the impugned Match income arises from international matches and matches allotted under Indian Premier League ( IPL ). The appellant has no role to play ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to make profit, will not make the activity a business. One may refer to the decision of the Supreme Court in Sole Trustee, Loka Shikshana Trust v. CIT, [1975] 101 ITR 234 (SC) in this regard. If the profits must necessarily feed a charitable purpose, under the terms of the trust, the mere fact that the activities of the trust yield profit will not alter the charitable character of the trust. The test now is, more clearly than in the past, the genuineness of the purpose tested by the obligation created to spend the money exclusively or essentially on charity . If that obligation is there, the income becomes entitled to exemption. That, in our opinion, is the most reliable test. The Supreme Court has held that the acid test is whether, on an overall view of the matter, the object is to make profit. The Court held that if after meeting the expenditure, if any surplus results incidentally from the activity lawfully carried on by the educational institution, it will not cease to be one existing solely for educational purposes, since the object is not one to make profit. [Aditanar Educational Institution v. Addl CIT [1997] 224 ITR 310 (SC)]. It is inevitable that in carr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncement of any other object of general public utility by virtue to proviso, would be excluded from the definition of charitable trust . However, for the application of the proviso, what is necessary is that the entity should be involved in carrying on activities in the nature of trade, commerce or business, or any activity of rendering services in relation to any trade, commerce or business, for a cess or fee or any other consideration. In such a situation, the nature, use or application, or retention of income from such activities would not be relevant. Under the circumstances, the important elements of application of proviso are that the entity should be involved in carrying on the activities of any trade, commerce or business or any activities of rendering service in relation to any trade, commerce or business, for a cess or fee or any other consideration. Such statutory amendment was explained by the Finance Minister's speech in the Parliament. Relevant portion of which reads as under:- I once again assure the House that genuine charitable organizations will not in any way be affected. The CBDT will, following the usual practice, issue an explanatory circular cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the first limb of definition of charitable purpose as defined u/s.2(15) of the Act and not under the residual clause of the advancement of any other object of general public utility . Learned counsel adds that if that be the situation, proviso to S.2(15) would not apply at all. Reliance is placed on the decision of Hon ble Gujarat High Court in the case of Director of Income-tax (Exemption) v. Ahmedabad Management Association [2014] 366 ITR 85 (Gujarat)] It is further submitted that since the terms trade, commerce or business is not defined under the scheme of the Act, general or dictionary meaning has to be resorted to. In order to determine whether an activity is in the nature of trade, commerce or business OR charitable, the determining factor is profit motive. The nature of activities may remain the same. However, if they are carried out for profit motive, the same are to be characterized as trade, commerce or business. Conversely, if the profit motive is absent, these very activities become charitable. Viewed thus, the activities of the assessee cannot be said to be commercial activities. Learned counsel further submits that it has been observed by the lower authorities tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... merely because some surplus has remained left over the expenditure to carry out such activities. The essence of trade, commerce or business is profit motive and absence thereof makes such activities charitable. Learned counsel further points out that even after insertion of proviso to S.2(15) of the Act w.e.f. 01/04/2009, the following authorities, after following the law laid down by Apex Court in Surat Art Silk (supra), have taken a view that if the predominant object of the Trust is of charitable nature and with no-profit motive, the said activities cannot be treated as trade, commerce or business merely because some surplus has remained left over the expenditure to carry out such activities : (a) CIT v. Gujarat industrial Development Corporation [2017] 83 taxmann.com 366 (Gujarat) (b) Director of Income-tax (Exemption) v. Ahmedabad Management Association [2014] 366 ITR 85 (Gujarat) (c) Sabarmati Ashram Gaushala Trust vs. ADIT (Exemption) [2014] 362 ITR 539 (Gujarat) (d) Institute of Chartered Accountants of India vs. DGIT reported in 347 ITR 99 (Delhi) (e) ACIT vs Delhi District Cricket Association (ITA No. 361/Del/2016 for AY 2010-11, dated 19/09/2018) 26. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n submitted that the BCCI is not a rank outsider for these cricket associations but the apex bodies of these cricket associations. These cricket associations act in tandem with the BCCI and the cricket is pursued in as commercial a manner as it can be pursued. Learned Commissioner refers to auction of players for playing matches and the format of the matches being improvised as per the requirements of commercial interests. It is submitted that cricket as it is pursued by the BCCI and its affiliates is pure entertainment, and these are the dictates of its entertainment value that decides the form and presentation of cricket. If it is a noble activity of education in a gentleman s sport, where is the need of auctioning of the players. The commerce is glaring in each facet of cricket today. He also submits that even imparting cricket coaching is a big business rather than a selfless education. As regards parity with the Improvement Trusts and Ahmedabad Urban Development Authority, learned Commissioner points out that these bodies are creatures of law for noble purposes. That s is quite unlike the pure entertainment generation by the activities of these associations and the BCCI. What ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee. We cannot be so na ve, according to the learned Commissioner, to be oblivious of these ground realities. We are thus urged to hold that the appellants before us are engaged in commercial activities and that they are not entitled to be treated as charitable institutions under section 2(15). 29. In a brief rejoinder, the common points made by the learned counsel for the assessee were that the activities of the BCCI cannot be subject matter of debate of this forum nor any conclusions can be drawn in respect of the same without even hearing the BCCI. In any case, even if it is assumed that BCCI is engaged in commercial activities, that would impact on taxability in the hands of the BCCI and not in the hands of the local cricket associations. It is submitted that these state cricket associations and the BCCI are distinct taxable units and must be treated as such, as there is no provision in the law that a member body can be held liable for taxation on account of activities of the apex body. Quite to the contrary, according to the learned counsel, in case BCCI is held to be involved in carrying out commercial activities, which is what the case of the revenue authorities is, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... servation of monuments or places or objects of artistic or historic interest) , were added and, on a more relevant note, a new proviso (i.e. fist proviso) was added to this provision, carving out an exception in the cases of advancement of any other object of general utility , and, by the immediately following Finance Act 2009, there was yet another proviso (i.e. second proviso) introduced to carve out an exception from the exception itself. In essence, the effect of these provisos was that even when an assessee was pursuing a charitable purpose in the event of advancement of any other object of public utility it would cease to be for charitable purposes if it involves (a) carrying on an activity in the nature of trade, commerce or business; or (b) rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of nature of use or application or retention of the income from such activity. However, these provisions are not to apply when the activities are such a modest scale that the value of receipts in respect of the same are less than ₹ 25 lakhs. These two provisos, as they stand now, are as follows: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eable to tax. Therefore, where industry or trade associations claim both to be charitable institutions as well as mutual members, these would not fall under the purview of s. 2(15) owing to the principle of mutuality. However, if such organizations have dealings with the non-members, their claim for charitable institution would now be governed by the additional conditions stipulated in proviso to s. 2(15). 3.2 In the final analysis, whether the assessee has for its object the advancement of any other object of general public utility is a question of fact. If such assessee is engaged in any activity in the nature of trade, commerce or business or renders any service in connection to trade, commerce or business, it would not be entitled to claim that its object is for charitable purposes. In such a case, the object of general public utility will only be a mask or a device to hide the true purpose which is trade, commerce, or business or rendering of any service in relation to trade, commerce or business. Each case would, therefore, have to be decided on its own facts, and generalizations are not possible. An assessee who claims that their object is charitable purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity, unless- ( i) such activity is undertaken in the course of actual carrying out of such advancement of any other object of general public utility; and ( ii) the aggregate receipts from such activity or activities during the previous year, do not exceed twenty per cent. of the total receipts, of the trust or institution undertaking such activity or activities, of that previous year 18. It may be noted that while the earlier proviso simply stated that exclusion from charitable purposes will come into play if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business , the requirement of exclusion clause extends even to situations in which such activi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pts, of the trust or institution undertaking such activity or activities, of that previous year . In other words, even when the activities are in the course of advancement of any other object of general public utility, but in the nature of trade, commerce or business etc, the proviso seeks to exclude it only when the threshold level of activity is not satisfied. Whether such a statutory provision stands the legal scrutiny or not is another aspect of the matter, and that is none of our concern at present anyway, it is beyond doubt that the new proviso, with effect from 1st April 2016, seeks to exclude, from the scope of section 2(15), the situations in which even in the course of pursuing advancement of any objects of general public utility when any activities in the nature of trade, commerce or business etc is undertaken in the course of actual carrying out of such advancement of any other object of general public utility , unless, of course, the activity level remains within the threshold limit i.e. receipts from such activities are less than twenty percent of total receipts of that year. 21. As the above provisions, which, in our humble understanding, seeks to restrict the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot necessarily imply profit motive in the activities of the assessee. What is important is the motive or the predominant object of the activities. The bids are invited by the assessee who allots the plots to the highest bidders. This, however, is because it is not desirable for the State to subsidise its businesses. A bidding process ensures transparency in the functioning of the trusts and therefore, it does not make the bidding process a commercial venture. Further the bids are invited only in the context of commercial units. Under the Rules there is a formula on the basis of which the price is worked out. The revenue did not deny the same but alleged that the profit motive is embedded in this formula as shown by the adjustments for various charges. 72. The Tribunal rightly rejected the contention that to fall within the ambit of the words advancement of any other object of general public utility the trust must necessarily be involved only in implementing poverty alleviation programs or doing other acts of charity. It is sufficient if it does precisely what the last category in Section 2(15) states namely being involved in activities for the advancement of an object of ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses of advancement of any other object of general public utility. If the conditions provided under the proviso are satisfied, any entity, even if involved in advancement of any other object of general public utility by virtue to proviso, would be excluded from the definition of charitable trust . However, for the application of the proviso, what is necessary is that the entity should be involved in carrying on activities in the nature of trade, commerce or business, or any activity of rendering services in relation to any trade, commerce or business, for a cess or fee or any other consideration. In such a situation, the nature, use or application, or retention of income from such activities would not be relevant. Under the circumstances, the important elements of application of proviso are that the entity should be involved in carrying on the activities of any trade, commerce or business or any activities of rendering service in relation to any trade, commerce or business, for a cess or fee or any other consideration. Such statutory amendment was explained by the Finance Minister's speech in the Parliament. Relevant portion of which reads as under :- 'I once again as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ributions from and participation of only their members, these would not fall under the purview of the proviso to section 2 (15) owing to the principle of mutuality. However, if such organizations have dealings with non-members, their claim to be chargeable organizations would now be governed by the additional conditions stipulated in the proviso to section 2 (15). 3.2 In the final analysis, however, whether the assessee has for its object ' the advancement of any other object of general public utility' is a question of fact. If such assessee is engaged in any activity in the nature of trade, commerce or business or renders any service in relation to trade, commerce or business, it would not be entitled to claim that its object is charitable purpose. In such a case, the object of ' general public utility' will be only a mask or a device to hide the true purpose which is trade, commerce or business or the rendering of any service in relation to trade, commerce or business. Each case would, therefore, be decided on its own facts and no generalization is possible. Assessees, who claim that their object is ' charitable purpose' within the meaning of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to establish other allied institutions like leather work and to recognize and help them in order to make the cow keeping economically viable; to publish study materials, books, periodicals, monthlies etc., in order to publicize the objects of the trust as also to open schools and hostels for imparting eduction in cow keeping and agriculture having regard to the trust objects. 12. All these were the objects of the general public utility and would squarely fall under section 2 (15) of the Act. Profit making was neither the aim nor object of the Trust. It was not the principal activity. Merely because while carrying out the activities for the purpose of achieving the objects of the Trust, certain incidental surpluses were generated, would not render the activity in the nature of trade, commerce or business. As clarified by the CBDT in its Circular No. 11/2008 dated 19th December 2008 the proviso aims to attract those activities which are truly in the nature of trade, commerce or business but are carried out under the guise of activities in the nature of ' public utility'. 34. What essentially follows from the above discussions is that, even after the 2008 amendment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l cricket associations. We are told that the matches are being organized by the Board of Cricket Control of India, but then, if we are to accept this claim and invoke the proviso to Section 2(15) for this reason, it will amount to a situation in which proviso to Section 2(15) is being invoked on account of activities of an entity other than the assessees- something which law does not permit. We are not really concerned, at this stage, whether the allegations about commercialization of cricket by the BCCI are correct or not, because that aspect of the matter would be relevant only for the purpose of proviso to Section 2(15) being invoked in the hands of the BCCI. We donot wish to deal with that aspect of the matter or to make any observations which would prejudge the case of the BCCI. Suffice to say that the very foundation of revenue s case is devoid of legally sustainable basis for the short reason that the commercialization of cricket by the BCCI, even if that be so, cannot be reason enough to invoke the proviso to Section 2(15). We are alive o learned Commissioner (DR) s suggestion that the cricket associations cannot be seen on standalone basis as the BCCI is nothing but an ape ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 2(15). All the objects of the assessee cricket associations, as reproduced earlier in this order, unambiguously seek to promote the cricket, and this object, as has been all along accepted by the CBDT itself, an object of general public utility. 36. Cricket is indeed an immensely popular game in this part of the world, and anything to do with cricket results in mass involvement of public at large. The sheer strength of these numbers results in higher visibility of cricketing activities and the scale of operations on which the work for development of cricket is to be carried out. These facts, by itself, and without the assessees before us deviating from their objects or venturing into trade, commerce or business, cannot require the activities to be treated as commercial activities. When a cricket stadium is to be built, it has to accommodate a very large number of persons but the size of the stadium would not mean that the activity is for anything other than promotion of cricket.. When the numbers are large, the scale of operations is large, and when scale of operations are larger, even the surplus or deficit could be large, but then the scale of operations may be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibition matches is limited entirely to its own members. The only contact it has with the public is by way of having them as spectators, on payment of a fee, of matches arranged by it. I find it impossible to hold that any benefit or entertainment which is thus paid for and which is availed of by only such members of the public as can or wish to pay for it can in any sense be a purpose of a charity. It is true that charity in the income-tax sense need not have any eleemosynary element in it and that an object of general public utility is under the income-tax law a charitable object. Indeed, if the objects professed by the Association are to be treated as charitable objects at all, they can be so treated only if they can be regarded as objects of general public utility. I find it impossible to hold that there is any general public utility, so as to amount to a charity, in arranging for cricket matches which the public can see on payment 38. The revenue thus does not derive any advantage from Cricket Association of Bengal s case (supra). The reliance of the Assessing Officer, on this judicial precedent, is wholly misplaced and in fact contrary to the stand of the CBDT on this i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness, it is not really necessary to adjudicate on this plea. We leave the question open for adjudication in a fit case. Conclusions on this issue: 42. For the detailed reasons set out above, we are of the considered view that the authorities below were in error in invoking the proviso to Section 2(15) and thus in declining the benefit of Section 11 and 12 to the appellant cricket associations. To this extent, plea of the appellants must be upheld. We uphold the plea. Individual appeals 43. Let us now take up each appeal and each ground of appeal individually. ITA No 1257/ Ahd/ 2013 44. This appeal is directed against the order dated 5th March 2013 passed by the CIT(A) in the matter of assessment under section 143(3) of the Income Tax Act, 1961, for the assessment year 2009-10. 45. In ground nos. 1 and 2, the grievances raised by the appellant are as follows: ( 1) The learned CIT(A) has erred in law and on facts in denying the applicability of Sec. 11 including 11(1)(b) and holding that the assessee is not carrying on charitable activity. ( 2) (a) The learned CIT(A) has erred in law and on facts in not accepting the claim of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... romotion of cricket in specified areas of Gujarat State. In the course of the reassessment proceedings, the Assessing Officer noted that assessee has received a sum of ₹ 1,58,00,000 from the Board of Cricket Control of India (BCCI, in short) as towards the TV rights. When he probed the matter further, it was explained by the assessee that nomenclature of the receipt apart, what has been received by the assessee is a corpus donation and the assessee did not have any right to get the said money from the BCCI, under a contract or otherwise. It was also explained that similar amounts received in the earlier years have been treated all along as corpus donations, and, therefore, the corpus donation received by the assessee, though termed as TV Rights, is not taxable. The Assessing Officer noted this contention as also the fact that under section 11(1)(d), what cannot be included as total income of the assessee is income by way of voluntary contributions made with a specific direction that they shall form part of the corpus of the trust or the institution . The Assessing Officer was of the view that what has been paid to the assessee is a share out of earnings by the BCCI, out of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TV subsidies should henceforth be sent to the Member Associations towards corpus funds . There is no dispute that the TV subsidy in question is sent under this resolution. On these facts, and in the light of the provisions of Section 11(1)(d) which only require the income to be by way of voluntary contributions made with a specific direction that they shall form part of the corpus of the trust or the institution , we are of the considered view that any payments made by the BCCI, without a legal obligation and with a specific direction that it shall be for corpus fund- as admittedly the present receipt is, is required to be treated as corpus donation not includible in total income. We are unable to find any legal support for learned CIT(A) s stand that each donation must be accompanied by a separate written document. The contribution has to be voluntary and it has to be with specific direction that it will form corpus of the trust . These conditions are clearly satisfied. Any payment which the assessee is not under an obligation to make, whatever be the mode of its computation, is a voluntary payment, and, any payment which is with a specific direction that it for corpus fund is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 2,13,34,033 is taxable in the hands of the assessee. Aggrieved, assessee carried the matter in appeal before the CIT(A). It was contended, as evident from the grounds of appeal, that the said amount was brought to tax, in the hands of the assessee, without giving any opportunity to the assessee. It was also contended that it was an infrastructure subsidy, in the nature of corpus donation, and, therefore, outside the ambit of taxable income. The appeal to the CIT(A) did not yield any success to the assessee. The assessee is now in second appeal before us. 54. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. 55. On a perusal of the BCCI Infrastructure Subsidy rules, we find that what is given to the assessee as infrastructure subsidy is reimbursement of 50% of costs in respect of certain expenditure on infrastructure which is inherently in the capital field. The mere fact that it is not a reimbursement to an outside party, such as a district cricket association, does not really matter. As long as the subsidy is relatable to a capital asset created by the assessee on hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Learned representatives fairly agree that this issue now stands concluded by Hon ble Supreme Court s judgment in the case of CIT Vs Rajasthani Gujarati Charitable Foundation [(2018) 402 ITR 441 (SC)] wherein Their Lordships have, inter alia , observed as follows: It is a matter of record that all the assessees are charitable institutions registered under Section 12A of the Income Tax Act (hereinafter referred to as 'Act'). For this reason, in the previous year to the year with which we are concerned and in which year the depreciation was claimed, the entire expenditure incurred for acquisition of capital assets was treated as application of income for charitable purposes under Section 11(1)(a) of the Act. The view taken by the Assessing Officer in disallowing the depreciation which was claimed under Section 32 of the Act was that once the capital expenditure is treated as application of income for charitable purposes, the assessees had virtually enjoyed a 100 per cent write off of the cost of assets and, therefore, the grant of depreciation would amount to giving double benefit to the assessee. Though it appears that in most of these cases, the CIT (A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , namely, that depreciation can be allowed as deduction only under section 32 of the Income-tax Act and not under general principles. The Court rejected this argument. It was held that normal depreciation can be considered as a legitimate deduction in computing the real income of the assessee on general principles or under section 11(1)(a) of the Income-tax Act. The Court rejected the argument on behalf of the revenue that section 32 of the Income-tax Act was the only section granting benefit of deduction on account of depreciation. It was held that income of a Charitable Trust derived from building, plant and machinery and furniture was liable to be computed in normal commercial manner although the Trust may not be carrying on any business and the assets in respect whereof depreciation is claimed may not be business assets. In all such cases, section 32 of the Income-tax Act providing for depreciation for computation of income derived from business or profession is not applicable. However, the income of the Trust is required to be computed under section 11 on commercial principles after providing for allowance for normal depreciation and deduction thereof from gross income of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... became effective from the Assessment Year 2015-2016. The Delhi High Court has taken the view and rightly so, that the said amendment is prospective in nature. 5. It also follows that once assessee is allowed depreciation, he shall be entitled to carry forward the depreciation as well. 63. Respectfully following the esteemed views of Hon ble Supreme Court, we uphold the plea of the assessee and direct the Assessing Officer to grant the depreciation even upon full cost of the asset being allowed. The assessee gets the relief accordingly. 64. Ground no. 6 is thus allowed. 65. In ground no. 7 to 11, the assessee has raised the following grievances: ( 7) The learned CIT(A) has erred in law and on facts in not allowing the set off of bro ught forward losses and unabsorbed depreciation which claim is supported by Jurisdictional High Court and other High Courts' decisions (Amount as may be determined in pursuance to Appellate Orders from A.Y. 2004-05 to 2008-09). ( 8) The learned CIT(A) has erred in law and on facts denying the deduction of capital expenditure of ₹ 4,61,70,970/- as allowable. ( 9) Alternatively, the learned CIT(A) has erre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion under section 2(15) and, accordingly, the assessee is entitled to relief under section 11. 72. Ground no. 1 is thus allowed. 73. In ground no. 2, the assessee has raised the following grievance: The learned A.O. and Hon'ble CIT(Appeals) have erred in law and on facts in rejecting the assessee's claim that it is engaged in Education and hence the provision of proviso to section 2(15) and section 13(8) are not applicable. 74. As we have held that the assessee was not engaged in any activity in the nature of trade, commerce or business, we see no need to deal with this alternative plea of the assessee. The grievance of the assessee is thus dismissed as infructuous. 75. Ground no. 2 is dismissed as infructuous. 76. In ground nos. 3 and 4, which we will take up together, the assessee has raised the following grievance: 3. (i) The learned A.O. and Hon'ble CIT( Appeals) have erred in law and in facts in rejecting the assessee's claim that various amounts received from BCCI, viz. T.V. Subsidy, IPL subvention etc are corpus donations which have been credited as capital receipts and holding that it is an income received from BCCI. ( ii) T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is that a direction may be given to compute the income as per provisions of section 11 of the Act, after giving deduction of 15%. Learned Departmental Representative does not oppose the prayer. We, therefore, direct the Assessing Officer accordingly. 81. Ground no. 5 is allowed in the terms indicated above. 82. In ground no. 6, the assessee has raised the following grievance: The learned A.O. has erred in law and on facts in not allowing the claim of mutuality vis-a-vis the income of members' club activity as claimed by the assessee and Hon'ble CIT(appeals) has erred in law and on facts in not accepts claim of assessee. 83. Learned counsel submits that as there was no adjudication on this grievance raised before the CIT(A), the matter may be restored to the file of the CIT(A) for adjudication on merits. This plea is not opposed by the learned DR. 84. With the consent of the parties, and in the light of the above discussions, the matter is restored to the file of the CIT(A) for adjudication on merits. 85. Ground no. 6 is thus allowed for statistical purposes. 86. In the result, ITA No. 3303/Ahd/16 i.e. appeal of the assessee for the assessment year 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f T.V, Rights, IPL subsidy etc is a voluntary payment by BCCI and when such distribution by BCCI has not been granted as a deduction to BCCI by it's A.O. ( ii) Alternative Ground of Appeal. The learned A.O. and Hon ble CIT(Appeals) have erred in law and on facts in rejecting the claim of assessee that when Exemption u/s 11 and 12, is not granted to assessee by applying Proviso to section 2(15) and section 13(8), the amounts paid by BCCI being non contractual payments i.e. voluntary payment, these receipts are not income as defined in section 2(24) of Income Tax Act, 1961. 4. The learned A.O. has erred in law and on facts in not allowing the capital expenditure as an expenditure towards objects of trust which is supported by various decisions of Honourable High Courts and Hon. CIT(A) has erred in law and on facts in not accepting the said claim of the assessee. 95. We find that identical issues came up for our adjudication for the assessment year 2009-10 and we have allowed the plea of the assessee in the terms indicated earlier in this order while dealing with the assessment year 2009-10. We see no reasons to take any other view of the matter for this as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e matter is restored to the file of the CIT(A) for adjudication on merits. 106. Ground no. 7 is thus allowed for statistical purposes. 107. In the result, ITA No. 3304/Ahd/16, i.e. appeal of the assessee for the assessment year 2011-12 is partly allowed in the terms indicated above. ITA No. 408/Ahd/17 108. We now take up appeal filed by the Gujarat Cricket Association for the assessment year 2012-13. 109. In ground nos. 1 the assessee has raised the following grievances: The learned A.O. has erred in law and on facts in applying Proviso to section 2(15) that assessee is engaged in activity in the nature of business and consequently section 13(8) of Income Tax Act, 1961 and there by rejecting the applicability of section 11 and 12 claimed by the assesses and the Hon'ble CIT(Appeals) has erred in confirming the decision of learned A.O. 110. We have, in our detailed analysis earlier in this order, held that the proviso to Section 2(15) does not come into play on the facts of these cases. Accordingly, we uphold the plea of the assessee to this extent. The assessee is thus held to be carrying out charitable activity within the meanings of that expressi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up for our adjudication for the assessment year 2009-10 and we have allowed the plea of the assessee in the terms indicated earlier in this order while dealing with the assessment year 2009-10. We see no reasons to take any other view of the matter for this assessment year. Respectfully following the stand taken for the assessment year 2009-10, we uphold the plea to that extent. As regards allowing the capital expenditure towards object of trust, that issue is infructuous at this stage and will come up for consideration before the Assessing Officer while giving effect to this order and computing income in terms of the Section 11. The AO shall deal with the same by way of a speaking order. 117. Ground nos. 3 and 4 are allowed in the terms indicated above. 118. In ground no. 5, the assessee has raised the following grievance: The learned A.O. has erred in law and on facts in not allowing the amount invested ₹ 10,50,00,000/- u/s 11(2) as claimed by the assessee and Hon. CIT(A) has erred in law and on facts in not accepting the claim of the assessee. 119. On this ground also, no specific adjudication at this stage. It is consequential in nature inasmuch as it will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r dated 7th November, 2014 passed by the CIT(A) in the matter of assessment under section 143(3) r.w.s. 147 of the Income Tax Act, 1961, for the assessment year 2009-10. 131. Ground nos. 1 to 3 challenge reassessment proceedings. However, learned counsel for the assessee submits that he does not wish to press these grounds of appeal. Accordingly, these three grounds of appeal are summarily dismissed for want of prosecution. 132. Ground nos. 1 to 3 are dismissed. 133. In ground nos 4 to 9, the assessee has raised grievance against the CIT(A) upholding proviso to Section 2(15) being invoked, against the income from cricketing activities being treated as business income, against resultant denial of exemption under section 11(1)(a), and against CIT(A) upholding the view of the AO of taxing interest income earned from corpus funds, surplus funds as non-charitable income. The dispute before us also involves the treatment of ₹ 7,21,22,353 received on account of corpus donation described as TV subsidy. 134. In view of our findings on the core issue in these appeals before us, as set out earlier in this order at pages 2 to 55 and in view of our decision above in the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 55 and in view of our decision above in the case of Gujarat Cricket Association on the issue, the assessee must succeed on these points. Learned representatives fairly agree that whatever we decide in the case of Gujarat Cricket Association, the same will equally apply in this case as well. We, therefore, uphold the plea of the assessee and allow these grounds of appeal to that extent in principle. There is, however, a rider. In this case, there is also a reference to the assessee organizing a one day international match, on commercial scale, for fund raising. That issue is dealt with in a separate ground of appeal. In case, it is held that the said one day international match is in the nature of commercial adventure, it will have the impact on section 2(15) being invoked. That ground is separately being remitted to the file of the CIT(A) for fresh adjudication, and the eventual decision on the same will also have the impact on these issues. We, therefore, remit the matter to the file of the CITI(A) for fresh adjudication in the light of our observations in the case of Gujarat Cricket Association (supra) and the findings on the said aspect of the matter. 143. Ground nos. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 12AA, stands cancelled, the assessee is anyway not eligible for the benefit of Section 11(1)(d). On the basis of this line of reasoning, the Assessing Officer treated the said amount of ₹ 1,58,00,000 as income of the assessee. Aggrieved, assessee carried the matter in appeal before the CIT(A) but without any success. It was pointed out to the CIT(A) that the BCCI has passed a specific resolution that the amount computed as TV subsidy is given to the Member associations as corpus donation. The CIT(A), identified the core issue for adjudication as follows: the fundamental question which now arises is whether the specific direction once issued is sufficient for the purpose of section 11(1)(d) or specific direction is required for each year individually . He then proceeded to answer this question by observing as follows: As per section 11(1)(d), a written specific direction is necessary to claim it as corpus donation. For a donation as a corpus donation, a written document with specific direction from the donor should be obtained and should accompany the donation from the donor. In absence of written direction, for a donation in a given assessment year, a donation wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 146. We see no reasons to take any other view of the matter than the view so taken in the case of Gujarat Cricket Association. Respectfully following the same, we uphold the plea of the assessee and direct the Assessing Officer to treat the TV subsidy of ₹ 4,00,00,000 received from the BCCI as a corpus donation. The assessee gets the relief accordingly. 147. Ground no. 2 is allowed in the terms indicated above. 148. In ground no. 3, the assessee has raised the following grievance: 3. The C.I.T. (Appeals) erred in withdrawing exemption u/s 11(1)(d) of the Income Tax Act, 1961 of ₹ 30,53,888/- received in the form of Corpus donation in form of Infrastructure Subsidy . 149. Learned representatives fairly agree that this issue is also covered by our decision in the case of Gujarat Cricket Association, and whatever we decide in the said case will equally apply in the present case as well. 150. Vide our decision earlier in this order, we have upheld similar claim of Gujarat Cricket Association and observed, inter alia, as follows: 51. On a perusal of the BCCI Infrastructure Subsidy rules, we find that what is given to the assessee as infrastructur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) on this issue. We order so. As we do so, and for the detailed reasons set out earlier while dealing with Gujarat Cricket Associations case, we make it clear that it is only in the event of this event being organized by the appellant cricket association on its own, rather than under arrangements and planning by the BCCI, that this could be put against the assessee as an adventure in the nature of trade, commerce or business. 155. Ground no. 6 is thus allowed for statistical purposes in the above terms. 156. In ground no. 8, the assessee has raised the following grievance: 8. Without prejudice to above the C.I.T. (Appeals) erred in not considering objects of imparting of knowledge about cricket is promotion of education as it is one of the chapter in the Physical Education and it is falls under Educational purpose under Charitable purpose u/s 2(15) of the Income Tax 1961 and therefore it does not attract proviso to section 2(15) of the Act accordingly provisions of section 13(8) of the Income Tax Act, 1961 are not applicable . 157. As we have allowed the main plea of the assessee, as set out in ground nos. 4 to 9, this plea is rendered academic and does not call for ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of appellant from the cricketing activities as business income u/s.28 without establishing the said activities as in nature of business trade or commerce. 9. The ld. CIT(A) erred in upholding view of ld. AO of taxing interest income earned from corpus funds/surplus funds as non-charitable income. 165. In view of our findings on the core issue in these appeals before us, as set out earlier in this order at pages 2 to 55 and in view of our decision above in the case of Gujarat Cricket Association on the issue, the assessee must succeed on these points. Learned representatives fairly agree that whatever we decide in the case of Gujarat Cricket Association, the same will equally apply in this case as well. We, therefore, uphold the plea of the assessee and allow these grounds of appeal to that extent in principle. There is, however, a rider. In this case, there is also a reference to the assessee organizing a one day international match, on commercial scale, for fund raising. That issue is dealt with in a separate ground of appeal. In case, it is held that the said one day international match is in the nature of commercial adventure, it will have the impact on section 2(15) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Assessing Officer was of the view that what has been paid to the assessee is a share out of earnings by the BCCI, out of proceeds of sale of TV rights, and is, as such, taxable as income of the assessee. It was observed that it cannot be said to be voluntary contribution by the BCCI. The Assessing Officer also shows that as accepted by the auditor of the company the amount is relatable to the TV rights and it cannot, therefore, be treated as voluntary contribution in the nature of corpus donations. He also noted that as registration of the assessee, under section 12AA, stands cancelled, the assessee is anyway not eligible for the benefit of Section 11(1)(d). On the basis of this line of reasoning, the Assessing Officer treated the said amount of ₹ 1,58,00,000 as income of the assessee. Aggrieved, assessee carried the matter in appeal before the CIT(A) but without any success. It was pointed out to the CIT(A) that the BCCI has passed a specific resolution that the amount computed as TV subsidy is given to the Member associations as corpus donation. The CIT(A), identified the core issue for adjudication as follows: the fundamental question which now arises is whether the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de of its computation, is a voluntary payment, and, any payment which is with a specific direction that it for corpus fund is a corpus donation. In our considered view, even without the two specific confirmations filed by the assessee, in the light of the BCCI resolution under which the payment is made and in the light of the payment not being under any legal obligation, the conditions under section 11(1)(d) are satisfied. We, therefore, uphold the plea of the assessee. The Assessing Officer is accordingly directed to delete this addition of ₹ 1,58,00,000 170. We see no reasons to take a different view, in principle, in this case. However, as relevant facts ned to be examined, the matter is remitted to the file of the Assessing Officer for fresh adjudication, in the light of our above observations. We order accordingly. 171. Ground no.5 is thus allowed for statistical purposes in the terms indicated above. 172. In ground no. 6, the assessee has raised the following grievance: The ld. CIT(A) erred in upholding view of ld. AO of withdrawing exemption u/s 11(1)(d) of the Income Tax Act, 1961 of ₹ 1.92 Cr. received in the form of Corpus donation. 173. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the following grievance: The ld. CIT(A) erred in not appreciating the fact that hosting of One Day International match ( ODI for short) is one of adventure to raise funds to carry out objects of the Trust. The income from said ODI cannot take colour of commercial activities or income. 178. We find that though there are findings to the above effect in the order of the Assessing Officer, the CIT(A) has dealt with the same in a very causal manner and without specific and categorical discussions on the same. We, therefore, deem it fit and proper to remit the matter to the file of the CIT(A) on this issue. We order so. As we do so, and for the detailed reasons set out earlier while dealing with Gujarat Cricket Associations case, we make it clear that it is only in the event of this event being organized by the appellant cricket association on its own, rather than under arrangements and planning by the BCCI, that this could be put against the assessee as an adventure in the nature of trade, commerce or business. 179. Ground no. 10 is thus allowed for statistical purposes in the above terms. 180. In ground no. 11, the assessee has raised the following alternative plea: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r we decide in the case of Gujarat Cricket Association and Baroda Cricket Association, the same will equally apply in this case as well. We, therefore, uphold the plea of the assessee and allow these grounds of appeal to that extent. 188. Ground nos. 1, 2 and 3 are thus allowed in the terms indicated above. 189. In ground no. 4, the assessee has raised the following grievance 4. The ld. CIT(A) has erred both in law and on the facts of the case in confirming the action of AO of not allowing exemption of ₹ 4,57,95,448/- claimed u/s.11(1)(d) of the Act. 190. There is no dispute that this amount of ₹ 4,57,95,448 represents infrastructure subsidy. Learned representatives fairly agree that this issue is also covered by our decision in the case of Gujarat Cricket Association and Baroda Cricket Association, and whatever we decide in the said case will equally apply in the present case as well. 191. Vide our decision earlier in this order, we have upheld similar claim of Gujarat Cricket Association and observed, inter alia, as follows: 51. On a perusal of the BCCI Infrastructure Subsidy rules, we find that what is given to the assessee as infrastructure subsidy i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue regarding charitable status of the assessee, and admissibility of consequent exemption under section 11, is decided above in favour of the assessee, the consequences will follow. We, therefore, remit the matter to the file of the Assessing Officer for granting consequential relief in accordance with the scheme of the law. 196. Ground nos. 5 and 6 are thus allowed for statistical purposes in the above terms. 197. No other grievance of the assessee requires any specific adjudication by us. 198. In the result, ITA No. 2839/Ahd/17, i.e. assessee s appeal for the assessment year 2012-13 is partly allowed in the terms indicated above. ITA No. 2840/Ahd/17 199. By way of this appeal, the assessee appellant has challenged correctness of the order dated 26th October 2017 passed by the CIT(A) in the matter of assessment under section 143(3) of the Income Tax Act, 1961, for the assessment year 2013-14. 200. In ground nos. 1,2 and 3, which we will take up together, the assessee has raised the following grievances: 1. The ld. CIT(A) has erred both in law and on the facts of the case in confirming the action of AO of holding that the appellant is not carrying on c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undisputedly is, it is outside the ambit of revenue receipt and taxable income. The very foundation of the stand of the Assessing Officer is thus devoid of legally sustainable merits. As such, there can hardly be an occasion, in principle, to hold such a subsidy as a revenue receipt or taxable income. There is not even a whisper of a discussion by the Assessing Officer to the effect that infrastructure subsidy is revenue in nature. As a matter of fact, the claim is made for the subsidy only after the expenditure having been incurred. The authorities below have simply brushed aside the case and the submissions of the assessee and proceeded to hold it as an income. Looking to the nature of the subsidy, which is clearly relatable to the capital assets generated, we are unable to hold this receipt in the revenue field. We, therefore, uphold the plea of the assessee on this point as well and delete the addition of ₹ 2,13,34,033. 206. We see no reasons to take a different view, in principle, in this case. However, as relevant facts ned to be examined, the matter is remitted to the file of the Assessing Officer for fresh adjudication, in the light of our above observations. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 of the Act. 215. In view of our findings on the core issue in these appeals before us, as set out earlier in this order at pages 2 to 55 and in view of our decision above in the case of Gujarat Cricket Association and Baroda Cricket Association on the issue, the assessee must succeed on these points. Learned representatives fairly agree that whatever we decide in the case of Gujarat Cricket Association and Baroda Cricket Association, the same will equally apply in this case as well. We, therefore, uphold the plea of the assessee and allow these grounds of appeal to that extent. 216. Ground nos. 1, 2 and 3 are thus allowed in the terms indicated above. 217. In ground no. 4, the assessee has raised the following grievance 4. The ld. CIT(A) has erred both in law and on the facts of the case in confirming the action of AO of not allowing exemption of ₹ 2,55,45,572/- claimed u/s.11(1)(d) of the Act. 218. There is no dispute that this amount of ₹ 2,55,45,572 represents infrastructure subsidy. Learned representatives fairly agree that this issue is also covered by our decision in the case of Gujarat Cricket Association and Baroda Cricket Association, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and on the facts of the case in confirming the action of AO of not allowing exemption of ₹ 8,14,37,615 claimed u/s. 11(1)(a) of the Act. 223. The above relief are only consequential in nature inasmuch these exemptions were denied on account of assessee being held to be not involved in a charitable activity under section 2(15) of the Act. Now that the issue regarding charitable status of the assessee, and admissibility of consequent exemption under section 11, is decided above in favour of the assessee, the consequences will follow. We, therefore, remit the matter to the file of the Assessing Officer for granting consequential relief in accordance with the law. 224. Ground nos. 5 and 6 are thus allowed for statistical purposes in the above terms. 225. No other grievance of the assessee requires any specific adjudication by us. Conclusions- Saurashtra Cricket Association 226. In the result, ITA No. 2841/Ahd/17, i.e. assessee s appeal for the assessment year 2014-15 is partly allowed in the terms indicated above. All the three appeals of the Saurashtra Cricket Association are thus partly allowed in the terms indicated above. 227. To sum up, all the ten ..... X X X X Extracts X X X X X X X X Extracts X X X X
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