TaxTMI 
TaxTMI 
TaxTMI 
2018 (4) TMI 796
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....in law the Ld. CIT(A) has erred in deleting the addition of Rs. 50,44,000/- made under section 56(vii) by terming the same as capital receipt?" 3. Briefly stated facts are that the assessee is a retired cricketer appointed as cricket coach by BCCI to train the players at national level. The assessee retired from international cricket in the year 2002. During the year under consideration i.e. FY 2010-11, a benefit match was arranged by BCCI for assessee. The assessee received net proceeds of Rs. 50.44 lakhs and credited the same to the capital account. The AO require the assessee to explain as to how this capital receipt. The assessee explained the benefit match is a game played for retired sportsman to appreciate personal talent and skill in sports and accordingly the funds collected on behalf of benefit match is capital receipt. The assessee placed reliance on CBDT Circular No. 477 [F.No.199/86-IT(A-1)], dated 22-1-1986, but the AO invoked the provisions of section 56(vii) of the Act and therefore, treated the receipts from benefit match as revenue receipt and brought to tax accordingly. Aggrieved, assessee preferred the appeal before CIT(A). 4. The CIT(A) after considering the ....
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.... drawn and the amount is a revenue receipt is not a correct conclusion. As submitted by the appellant, the nature of receipt will not change because of the drawing of the P&L account. 6.9 The AO, assessed the receipt u/s 56(vii) of the Act which is brought in to the statue w.e.f 01-10-2009 which says that any sum of money without consideration, the value which exceeds the amount of Rs. 50,000/- received by an individual or HUF the whole of the aggregate value of the sum is assessable as 'Income from other Sources'. The amendment is brought in through introducing the provision, to plug the loopholes and to prevent money laundering at the time of abolition of gift tax. The amount received by the appellant is no way fit into this provision, as stated by the AO in the assessment order, to make the addition. This amount represents the token of gratitude from the fans and followers by attending the benefit match conducted in honour of the retired sports person and in no way can be construed as a transaction formulated for the purpose of money laundering and also not income camouflaged as gift. 6.10 The Circular No. 447 dt. 22-01-1986 of the CBDT also states that an award rece....
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....gate value exceeds Rs. 50,000/- the whole amount of aggregate sum will be treated as income. The learned Sr. Departmental Representative also drew our attention to the fact recorded by AO that the assessee Shri Sameer Sudhakar Dighe is neither a player nor represented in International Cricket and also he is not part of Indian Team at any given time. In view of these facts, the learned Sr. Departmental Representative urged the bench to restore the order of the Assessing Officer. 6. Before us the learned Counsel for the assessee stated that the assessee has represented team India at international level and team Mumbai at national level as a Wicket Keeper. The assessee retired from the cricket in the year 2002 and was appointed as cricket coach by the BCCI to train the players at national level. The learned Counsel for the assessee filed data from Wikipedia about his domestic, international, coaching career and the same reads as under: "Sameer Dighe - (born 8 October 1968, in Bombay - now Mumbai) is an Indian cricketer. He is a right-handed batsman and a wicket-keeper. His main chance at international cricket did not come until the 1999-2000 season, at which time he was 31 years of....
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....at the receipts were not the result of any professional activity. He is a full-time employee with the State Bank of India holding the post of an officer. Cricket was not for his living. It was stated at the bar that there is no professional cricket in India. The assessee obviously plays for love of cricket and because of his great talents he had been in the team that represented India for playing in Pakistan. These facts are fairly certain from the records. 8. A decision of the Delhi Bench of the Tribunal in the case of Navab Mohd. Mansur All Khan [1975] Tax. 40(6)-21 was cited wherein it is held that an award given as "best batsman" did not amount to any professional income. The CBDT has, in a Circular No. 447 [F. No. 199/86-IT(A-I)] dated 22-1-1986, clarified that awards received by a sportsman who is not a professional will not be liable to tax. As we have pointed out, cricket was not the profession of the assessee, but only a vocation. 9. It may be apposite to refer to the decision of the Madras High Court in the case of CIT v. M. Balamuralikrishna [1988] 171 ITR 447 wherein it is held that amounts received from admirers and fans of a musician in appreciation of his service....
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....who is not a professional sportsman has won the gold medal for the first time after 60 years of independence of the country and he has been given the awards/rewards/prizes mainly by various Governments, local authorities, trusts and institutions and of course some corporate/individuals, a liberal construction of Circular No.447 is required. Considering the facts of the case and the nature and spirit of Circular No.447, we hold that in the case of the assessee, viz., Shri Abhinav Bindra, all the rewards/prizes/gifts received by him are covered by Circular No.447 dated 22nd January, 1986 and, therefore, should not be treated as income in his hands. Accordingly, the addition of Rs. 63,10,601/- made by the Assessing Officer and the enhancement of Rs. 2,34,00,000/- made by the learned CIT(A) is deleted." 9. Further, we find that the AO has applied the provisions of section 56(2)(vii)(a) of the Act. The relevant provision of section 56(2)(vii)(a) of the Act reads as under:- "(vii) where an individual or a Hindu undivided family receives, in any previous year, from any person or persons on or after the 1st day of October, 2009 5[but before the 1st day of April, 2017],- (a) any sum of....