Tribunal exempts cricketer's award money, allows expenditure, and grants deduction for foreign receipts

The Tribunal upheld the CIT(A)'s rulings, exempting the award money received by the cricketer as "Man of the Match" and allowing expenditure against logo money. Additionally, the Tribunal granted the deduction under Section 80RR for foreign receipts from acting in advertisements, based on the assessee's special talent, contrary to the A.O.'s decision. The separate judgments resulted in the dismissal of the Revenue's appeals and partial allowance of the Assessee's appeals.

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Issues Involved:
1. Exemption of award money under Section 10(17A).
2. Allowance of expenditure against logo money under Section 57(iii).
3. Deduction under Section 80RR for foreign receipts from acting in advertisements.

Detailed Analysis:

Issue 1: Exemption of Award Money under Section 10(17A)

The Revenue contested the exemption of Rs. 3 lakhs received as "Man of the Match" awards, arguing that the assessee is a professional player and thus the award money should be taxable. The assessee, a reputed cricketer and an officer at the State Bank of India, contended that he is not a professional cricketer and that the amounts received were not taxable based on Board Circular No. 447/199/1/86IT(A1) dated 22.01.1986. The CIT(A) upheld the assessee's claim, following the ITAT Bangalore Bench decision in the case of Mr. G.R. Viswanath vs. Fifth ITO 29 ITD 142, and ruled that the amounts received were exempt from tax. The Tribunal agreed with the CIT(A) that the assessee is not a professional cricketer and upheld the exemption of the award money.

Issue 2: Allowance of Expenditure Against Logo Money under Section 57(iii)

The assessee claimed an expenditure of Rs. 18,86,455 against the income from logo money of Rs. 32,24,411. The A.O. disallowed the entire expenditure, stating that the assessee failed to explain its relevance to earning the logo money. The CIT(A) partially accepted the claim, allowing Rs. 8,75,000 paid by cheque and disallowing 20% of the total claim due to lack of verifiable bills and vouchers. The Tribunal upheld the CIT(A)'s decision, noting that the Board's Circular recognized that players incur substantial expenses, and the disallowance was reasonable.

Issue 3: Deduction under Section 80RR for Foreign Receipts from Acting in Advertisements

The assessee claimed a deduction under Section 80RR for Rs. 40,00,197, being 75% of foreign receipts from acting in advertisements. The A.O. denied the claim, arguing that the assessee, being a cricketer and an employee of SBI, cannot be considered a professional actor. The CIT(A) upheld the A.O.'s decision, stating that the assessee's popularity as a cricketer led to the advertisement offers, not his professional acting skills. The Tribunal disagreed, citing the ITAT Mumbai decision in the case of Sachin R. Tendulkar vs. ACIT, which recognized that acting in advertisements required special talent and could be considered a profession. The Tribunal allowed the deduction under Section 80RR.

Separate Judgments:

ITA.No.194/Hyd/2002: Revenue's appeal dismissed.

ITA.No.46/Hyd/2003: Revenue's appeal dismissed; Assessee's appeal partly allowed.

ITA.No.225/Hyd/2003: Assessee's appeal partly allowed.

ITA.No.647/Hyd/2004: Assessee's appeal allowed.

ITA.No.1040/Hyd/2004: Assessee's appeal partly allowed.

Conclusion:

Overall, the Tribunal upheld the CIT(A)'s rulings on the exemption of award money and the allowance of expenditure against logo money. It also recognized the assessee's entitlement to deduction under Section 80RR for foreign receipts from acting in advertisements, aligning with precedents set in similar cases.

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