2006 (11) TMI 162

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....stions of law arising from the order of the Tribunal for consideration in this appeal : "(1) Whether, on the facts and circumstances of the case, the Income-tax Appellate Tribunal was legally justified in law in deleting the disallowances of Rs. 1,50,000 made by the Assessing Officer and confirmed by the Commissioner of Income-tax (Appeals) even though the assessee failed to establish that the payment made to State Polo Club alleged to be the fee for the sponsorship of Mewar OMS Trophy had any element of publicity or advertisement of its hotel business ? (2) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was legally justified in holding that the assessee is entitled for deprec....

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.... providing Mewar OMS Polo Trophy. The Assessing Officer has opined that the activity of sports and the assessee' s business have no connection and, therefore, the sponsorship of the tournament is not fully associated with the business promotion of the assessee so as to fall within section 10(2)(xv) of the Income-tax Act. The Tribunal, however, found that the sponsorship of the tournament by the assessee was purely motivated by business interest of the assessee inasmuch as the sponsorship of tournament carries high potential advertisement value for the business of the assessee and the activity is thus part of the business of the assessee. Sponsorship and holding of a tournament by awarding a trophy of one' s trade name is an activity....

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....ction 37 of the Income-tax Act, 1961. In the aforesaid decision, the Bench of the Delhi High Court upheld the Tribunal' s finding that by holding the tournament the assessee got publicity for its business and the reports in the newspapers went a long way to make the assessee a household word and also provided opportunity to the employees of the mills to participate and witness such tournaments which was an amenity very necessary in modern times and thus holding the tournament was helpful to the business interest of the assessee. 9. It is no gainsaying that sponsoring of a tournament in which the display of the sponsor' s name and banners with the name of the assessee-company attached with the trophy would receive wide publicity t....