2018 (4) TMI 796 - AT - Income Tax

Retired cricketer's benefit match proceeds deemed non-taxable; Tribunal upholds CIT(A)'s decision.

The Asst. Commissioner of Income Tax, Circle 19 (3) Mumbai Versus Shri Sameer Sudhakar Dighe

The Tribunal determined that the amount received from the benefit match by the retired cricketer was a capital receipt, not taxable under section 56(vii) ... Addition on the amount received in regard to Benefit Match fee - revenue or capital receipt - AO assessed the proceeds of benefit match of the assessee under section 56(2)(vii)(a) of the Act, which is brought in the statue book with effect from 01.10.2009 - Held that:- The facts available in public domain are that the assessee has played national as well as international cricket. The assessee has played international test matches numbering 6 and ODI’s numbering 23. The assessee is full time employee of Air India. The benefit match was conducted by the BCCI, which is a regulatory body for cricket in India to appreciate the personal talent and skill in this sport because the assessee is a retire sportsman and the proceeds arising out of this benefit match is in the nature of award. There is no direct nexus between the payment and assessee’s profession and these receipts being capital in nature cannot be brought to tax. As amount represents the gratitude from the fans and followers by attending the benefit match conducting in honor of the assessee, who is a retired cricketer of international repute. This type of receipts has specifically been exempted by the CBDT circular No. 477 [F. No. 199/86-IT(A-1)] dtd. 22.01.1986, which states that the amount paid to amateur sportsman who is not a professional will not be liable to tax in his hands as it would not be in the nature of income. The assessee was an amateur cricketer and his profession is employment with Air India from where he is getting salary. He played the game of cricket for India as his passion and the receipts of the net proceeds for the benefit match was only in the nature of appreciation of his personal achievements and talent and thus, cannot be brought to tax by invoking the provisions of section 56(2)(vii)(a) of the Act. This proceeds from benefit match received by assessee is in appreciation of his past achievements in the International Cricket arena and such type of receipt cannot be taxed because these type of receipts are specifically exempted. Accordingly, we are of the view that the CIT(A) has rightly deleted the addition and we confirm the order of CIT(A). - Decided against revenue Issues Involved:1. Whether the amount received from a benefit match should be treated as capital receipt or revenue receipt under section 56(vii) of the Income Tax Act, 1961.Issue-Wise Detailed Analysis:1. Treatment of Benefit Match Fee as Capital Receipt or Revenue Receipt:The primary issue in this case was whether the amount of Rs. 50,44,000 received by the assessee from a benefit match should be treated as a capital receipt or a revenue receipt under section 56(vii) of the Income Tax Act, 1961.Facts and Arguments:- The assessee, a retired cricketer, received Rs. 50.44 lakhs from a benefit match organized by the BCCI.- The assessee declared this amount as a capital receipt and credited it to his capital account.- The Assessing Officer (AO) treated this receipt as a revenue receipt under section 56(vii) of the Act, arguing it was taxable as 'Income from Other Sources.'- The AO's decision was based on the statement from the MD of the organizing company and the fact that the benefit match was not directly related to the assessee's professional activities.CIT(A)’s Observations:- The CIT(A) considered the submissions and the relevant CBDT Circular No. 447 dated 22-01-1986.- It was noted that the benefit match was organized to honor the assessee's talent and skills as a retired sportsman, and the proceeds were a token of esteem and respect, not a revenue receipt.- The CIT(A) highlighted that the drawing of a profit and loss account by the organizers did not change the nature of the receipt.- The CIT(A) also referenced judicial precedents, including the case of G. R. Viswanath vs. ITO, where similar receipts were deemed non-taxable.Tribunal’s Analysis:- The Tribunal reviewed the facts and confirmed that the assessee had represented India in international cricket and was a full-time employee of Air India.- The Tribunal emphasized that the benefit match proceeds were in the nature of an award for the assessee's contributions to cricket, not linked to any professional activity.- The Tribunal cited the CBDT Circular No. 447, which exempts awards received by non-professional sportsmen from tax, supporting the assessee's claim.- The Tribunal also referred to similar cases, including Abhinav Bindra vs. DCIT, where awards received by non-professional sportsmen were not treated as taxable income.Conclusion:- The Tribunal concluded that the amount received from the benefit match was a capital receipt, not taxable under section 56(vii) of the Act.- The Tribunal upheld the CIT(A)'s decision to delete the addition made by the AO, confirming the non-taxable nature of the benefit match proceeds.Result:- The appeal by the Revenue was dismissed, and the order of the CIT(A) was confirmed.Order Pronouncement:- The order was pronounced in the open court on 13-04-2018.