TMI Blog2019 (7) TMI 931X X X X Extracts X X X X X X X X Extracts X X X X ..... d order are upheld. Consequently, the appeal filed by the Revenue is hereby dismissed. - ITA No.189/Del./2017 - - - Dated:- 16-7-2019 - Shri R.K. Panda, Accountant Member And Shri Kuldip Singh, Judicial Member For the ASSESSEE : Shri Ved Jain, Advocate For the REVENUE : Ms. Nidhi Srivastava, CIT DR ORDER PER KULDIP SINGH, JUDICIAL MEMBER : Appellant, DCIT (E), Circle 1 (1), New Delhi (hereinafter referred to as the assessee ) by filing the present appeal sought to set aside the impugned order dated 25.10.2016 passed by the Commissioner of Income-tax (Appeals) - 40, New Delhi qua the assessment year 2012-13 on the grounds inter alia that :- On the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in directing the AO to allow exemption u/s. 11 (1) of the Act particularly when the assessee has shown receipts from Sponsorship Income Sale of Liquor, Income from Corporate Boxes, Sale of Tickets and Advertising/Contractual Receipts which are purely commercial in nature. 2. Briefly stated the facts necessary for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dep. on assets added during AY 2012-13 Building/Stadium 10% 121349243 Furniture Fixture 10% 704110 Electronic/Electrical Office Items, P M 15% 6909543 Vehicles 15% 96487 Computer H/W S/W 60% 793730 Total Dep. 12,98,53,113 9. During the year the assessee has incurred expenditure of ₹ 1,37,66,227/- in cash. Out of this expenditure some payments have been made to employees as ex-gratia or other benefits, D.A. to Directors on tour, diesel expenses etc. which are considered outside purview of se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 2,33,50,425/- Tax as per normal rate Nil Tax calculation as per section 115JB of I.T. Act, being company is registered under Company Act Book Profit ₹ 4,70,70,202/- @ 18.5% ₹ 87,07,987/- Assessed as above. Since the assessee has filed its return u/s 139(4) on 19-02-2013, it is not allowed to carry forward the above loss determined in the current assessment year. 3. Assessee carried the matter by way of an appeal before the ld. CIT (A) who has partly allowed the appeal. Feeling aggrieved, the Revenue has come up before the Tribunal by way of filing the present appeal. 4. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case. 5. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) vide its order dated 23.5.2012 has withdrawn the registration u/s 12AA (3), precisely on the same issues which has been raised by the Assessing Officer in the impugned order: This is prima facie evident from the facts and issue discussed in detail by the Tribunal in its order dated 13.1.2015. On a plain reading of the decision of the Tribunal, we find that on exactly same points as, raised by the DIT (E) and also argued from the side of the Department, this Tribunal has taken note of all these objections raised by the revenue as well as the submissions made by the assessee and after relying upon the decision of Hon'ble Madras High Court in the case of Tamil Nadu Cricket Association vs. DIT (E) reported in 360 ITR 633 and the decision of Hon'ble Delhi High Court in the case of GS 1 vs. DIT (supra), the Tribunal held that assessee's activities revolves around cricket only which falls within the ambit of 'charitable purpose'; and none of its activities fall in the nature of trade, commerce or business. The relevant observation and finding of the Tribunal in this regard reads as:- 10.6. Thus applying the principles laid d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... activities in the nature of trade, commerce or business. J) These receipts are intrinsically related, interconnected and interwoven with the charitable activity and cannot be viel.ued separately. The activities resulting in the said receipts are also charitable activities and not trade, commerce or business activities. 11. We now take up each of the issues raised by the Ld. DIT (E) in his order. 11.1 On the issue of sponsorship income from M/s. Twenty First Century Media (P) Ltd. (TFCM), it was explained that, despite the receipt of sponsorship money during the year of ₹ 31,01,038/- and receiving a sum of ₹ 14,20,000/- from BCCI as subsidy, there was a short fall of ₹ 29,84,835/-, which was met by the assessee. It was specifically argued by the Ld. D.R. that the agreement with M/s Twenty First Century Media Pvt. Ltd. is commercial in nature. The reply of the assessee is that it should be appreciated that, for any organization to run and survive it is essential that it should augment some funds to meet the cost/ expenditure, as required to be incurred, to carry out the activities meant to achieve its object. We agree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elhi Cricket Association . He referred to the objects and submitted as follows. One of the objects as given in the MOA of DDCA is to lay ground for playing game of cricket and to provide pavilion, refreshment rooms and other facilities in connection therewith. Therefore, an eatery was established which was eventually shaped as a canteen for the benefit of the members as well as few other persons associated with DDA e.g. players) coaches, staff, other guests etc. 11.4. In our view for the purpose of making this Canteen self sustainable, it has to follow global standards and international protocols, since cricket is played at international level. Canteen keeps various items as per menu. Liquor is just part of this menu. It is not sold independently as trading item. The eatery is available for the use only of members, players, staff and other guests of DDCA. It is not open for public. A walk in customer/ guest, cannot enjoy the facility of this eatery. The basic fact is that this canteen has direct and inextricable link with one of the core activities of DDCA i. e. maintaining such a huge cricket stadium and promoting the game of cricket. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the game of cricket. These expenses have been incurred either for the development of game of cricket or the development of players. There is no other cause or item for which any amount has been spent by the assessee. Similarly, when we analyse the receipt side, we would find that the receipts are directly or inextricably linked with the organizing of matches and Tournaments or for promotion of game of cricket in any other manner or for maintenance or building up the infrastructure meant for the promotion of the game of cricket. Thus, it can be safely said that the DDA exists for cricket and cricket only. The CBDT has already clarified that sports is a matter of general public utility. Therefore DDCA satisfies the condition of having a charitable object as mentioned in S.2 (15) of the Income Tax Act, 1961. It does not violate any condition as mentioned in pro viso to S.2 (l5). The apprehension that certain income received by the assessee, during the year, partake the character of business income, is ill founded. In this regard we have submitted in detail that this apprehension is misplaced on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rol the crowds and that the cost incurred per ticket is much more than the amount which is charged for ticket. Under these circumstances, the sale of tickets cannot be considered as an activity of trade, commerce or business . We agree with the submissions of the assessee. 11.9. Regarding playing cards, it is an incidental recreation activity undertaken in most Clubs and what is charged by the assessee, goes to recover the' costs for providing such recreational facility to, its member. The receipts are miniscule and hence negligible. 11.10. Similarly as far as receipts from health club is concerned, we find that, only a part of the expenditure incurred on health club is recovered by way of charges from Members, who are using the health club facility. These are all, at best be called user charges. In our view these receipts cannot be termed as an activity in the nature of trade, commerce or business. In fact health Club facility is recognized to promote the game of cricket. 11.11. All the receipts of the assessee are intrinsically linked with the activity of organizing matches and tournaments for the promotion of c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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