TaxTMI 
TaxTMI 
2018 (9) TMI 1311
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....es of the Association and to provide pavilion, refreshment rooms and other conveniences in connection therewith and with a view purchase, lease or otherwise acquire land at such price or rent and for such period and condition as may seem expedient. (iii) To finance and assist in financing of teams. (iv) To assist in organizing or promotion of provincial Cricket Associations and Inter Provincial Tournaments. 3. The assessee association was registered u/s 12A of the I.T. Act, 1961 vide Order No.633/96 dated 06.03.1997. However, the same was withdrawn w.e.f. 01.04.2009 for assessment year 2009-10 onwards vide order dated 21.05.2012 of the DIT (Exemptions), Delhi. The Assessing Officer, during the course of assessment proceedings, observed that the assessee association is receiving income from corporate boxes, Champion League T-20 matches, income from IPL matches, membership subscription fee, tournament subsidy and sponsorship money. It is also receiving income from sale if liquor etc. The Assessing Officer observed that in the immediately preceding assessment year i.e. assessment year 2009-10 the activity of the assessee has been held to be commercial in nature an....
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....ment and the exemption was allowed. 4.9 It may not be out of place to mention that the word charitable purposes is not defined in the I.T. Act, 1961 and only an inclusive definition has been provided in Section 2(15) and as per the present statute, it is apparent that any activity for public good will come within the definition of charitable purposes u/s 11(1). 4.10 After considering all the facts and circumstances of the case, I am of the view that the assessee is a charitable institution and is involved in charitable activity and the income is applied for charitable purposes within the meaning of Section 11(1) of the I.T. Act, 1961 and as such the assessee is eligible for exemption u/s 11(1) and the AO is not justified to make any addition or disallowance as the same is not consistent within the provision of Section 11(1) and accordingly the AO is directed to allow exemption u/s 11(1) to the assessee with all the consequential benefits and all the additions and disallowances made by the AO are consequently deleted and as such the appeal of the assessee is allowed." 6. Aggrieved with such order of the ld. CIT(A), the Revenue is in appeal before the Tribunal by....
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....relevant observations of the Tribunal from para 6 onwards read as under :- "6. We have heard the rival submissions and also perused the relevant finding given in the impugned order as well as order of the Tribunal as relied upon by the Learned Counsel. From the perusal of the assessment order, it is seen that the ld. Assessing Officer has denied the exemption u/s 11(1) on the ground that now in wake of newly inserted proviso to section 2(15) with effect from 1.4.2009, the assessee's activities could no longer be held to be charitable in nature. He has analyzed the various sources of income and also various agreements through which the assessee was earning its income like sponsorship income, sale of liquor, income from corporate boxes, sale of tickets, advertising/contractual receipts, income from IPL matches and television subsidy receipt from BCCI. While analyzing these nature of incomes/receipts earned by the assessee, he also examined the various agreements entered by the assessee. After analyzing these agreements and nature of income he came to the conclusion that the assessee's activities falls within the ambit of trade, commerce or business. After coming to such conc....
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.... receipts were from: 1. Subscription 2. Renting for hiring cricket ground rooms and premises 3. Fee for providing services for IPL 4. Income from advertisement 5. Subsidy from BCCI 6. Sale of tickets for conducting the matches and 7. Restaurant and catering income. Such receipts of money by the Tamil Nadu Cricket Association were not considered by the Hon'ble Madras High Court, as activities in the nature of "trade, commerce or business". There is no contrary decision cited by the Revenue. Thus none of the above streams of income, when received by the assessee would constitute business activity for the assessee. 10.9. Thus respectfully following the decision of Hon'ble Madras High Court in the case of Tamil Nadu Cricket Association (supra), we have to hold that the amounts received by the assessee from a) ground booking charges, b) health club charges, c) income from corporate boxes, d) lawn booking income, e) sponsorship money and sale of tickets, advertisement, souvenirs and other such receipts do not result in the assessee being held as undertaking activities in the nature of "trade, commerce or business." These rece....
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....e form of an agreement. Merely because an activity is performed in an organized manner, that alone will not make these activities as business/commercial activity. Profit motive is one essential ingredient, which is apparently missing in this case. In carrying out an activity, one may earn profit, or one may incur loss. But for making it as business activity, the presence of profit motive is a sin qua non i.e. condition precedent at the time of entering into transaction. In this case the facts demonstrate that despite the receipt of amount from sponsorship and subsidy from BCCI, there was deficit, which was met by the assessee. Thus this adjustment resulted in subsidizing the cost of the assessee and hence there is no profit motto. This cannot be termed as business activity. Similar is the view of the Hon'ble Madras High Court in the case of Tamil Nadu Cricket Association (supra). 11. 3. On the issue of sale of liquor, it was submitted that initially DDCA was formed as a Club to take over the assets and liabilities of the Association called, "Delhi Cricket Association". He referred to the objects and submitted as follows. "One of the objects as given in the MOA of ....
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....cannot be termed as business or that the assessee has undertaken activity in the nature of "trade, commerce or business". 11.7. On receipts from IPCL an elaborate explanation was given, the pith and substance is that expenditure has to be incurred by the DDCA on various items, as coordination has to be done and the aggregate of expenditure incurred for the same is Rs. 238 lakhs. It was submitted that the DDCA, initially meets this expenditure out of its own sources and there after the BCCI and legal franchisee, contribute and compensate part of this expenses. The same arguments as were advanced by the assessee in the cases where sponsorship money received, were made here also. The summary of the submissions are as follows. "Our respectful submission is that, as we have given detailed submission in earlier part of our submissions wherein we have made analyses of receipts as well as of the expenses incurred by the assessee. The analysis of expenses have revealed that the expenses have been incurred on the promotion of the game of cricket. These expenses have been incurred either for the development of game of cricket or the development of players. ....
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....he sole and dedicated purpose i.e. for the promotion of cricket. 8. These facts are worth noting that (a) the assessee has not diverted its funds for any purpose other than promotion of cricket; (b) the assessee has not done any activity or transaction with profit motive, (c) the assess has not done any activity beyond and outside its objects and (d) there is no change in facts so as to deviate from the stand taken by Ld.A.O. in all the past years accepting the claim of the assessee all along on facts as well as on law. 11.8. In view of our decision of sponsorship and such other receipts, we agree with the arguments made by the assessee. Regarding sale of tickets the assessee explained that no tickets are sold for Ranji Trophy and only in case of international matches, Rs. 200/- per ticket are levied, with a sole intention to control 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 recre....