TaxTMI 
TaxTMI 
TaxTMI 
2018 (12) TMI 325
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.... the circumstances of the case and in law, the Ld. CIT(A) has erred in ignoring the fact that the receipts are on account of sponsorship fee and royalty are in the nature of business income within the meaning of provisions of sub-section 4A of section 11 of the I.T. Act. The assessee failed to maintain separate books of accounts as per sub section 4A of the Section 11 of the I.T. Act." Ground raised in appeal No.4755/Del/2016 (A.Y. 2010-11): "1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law in ignoring the fact that the receipts are on account of sponsorship and royalty are in the nature of business income and hits the amended proviso of section 2(15) of the Income Tax Act, 1961." 2. The facts attending to both these appeals are similar in nature and therefore, both these appeals are being disposed of by this consolidated order for the sake of convenience and brevity. We, therefore, take up the appeal for A.Y. 2010-11, the decision on which will apply mutatis mutandis in appeal for assessment year 2012-13. 3. The brief facts of the case are that the assessee is a society registered under Societies Registration Act, 1860 vide Reg....
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....le II of the Foreign Exchange Management (Currency Account Transactions) Rules, 2000, which clearly says that prior approval of Central government is not required in case of remittance of prize money/sponsorship of sports activity abroad International/national/state-level sports bodies. The assessee is an organisation of national level. The Ld. Assessing Officer noted that out of Rs. 1,18,72,543/- a sum of Rs. 98,27,626/- have been incurred for purchase of foreign currency from New Found Land Enterprises (P) Ltd. and given to WFI representatives going for competitions abroad for incurring it outside India pertaining to International Championship. Expenses have been incurred outside India without the permission of the CBDT in this behalf as envisaged under Section 11 (1) ( c ) of the Income Tax Act, therefore, the Assessing Officer disallowed a sum of Rs. 98,27,626/- for non application of income in India and added into the total income of the assessee. Aggrieved from the order of the Ld. Assessing Officer the assessee appealed before the Ld. CIT (A) and made written submissions before him also. The Ld. CIT (A) after considering the order of the Assessing Officer and submissions of ....
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....lso filed paper book containing 98 pages in which he has submitted a written synopsis and relying some case laws as under : - (2015) 372 ITR 699 (SC) QUEEN'S EDUCATIONAL SOCIET VS CIT - (2015) 43 ITR 656 ( TRIB) DELHI DIT (EXEMPTION) VS ALL INDIA FOOTBALL FEDERATION . - (2018) 403 ITR 49 ( DELHI) DIT (E) VS DELHI PUBLIC SCHOOL SOCIETY - (2018) 400 ITR 0066 (AP) PRINCIPAL COMMISSIONER OF INCOME TAX VS INSTITUTE FOR DEVELOPMENT AND RESEARCH IN BANKING TECHNOLOGY. - (2017) 58 ITR ( Trib) 0431 ( Chennai) Dy Commissioner of Income Tax vs Tamil Nadu Cricket Association . - (2017) 55 ITR ( Trib) 149 ( DELHI) SOCIETY FOR PARTICIPATION RESEARCH IN ASIA VS INCOME TAX OFFICER (E). 6. After hearing the both sides and perusing the entire materials available on record and orders of the authorities below, we are of the opinion that the Ld. CIT (A) has done good reasoned order which needs no interference. The findings reached by the ld. CIT(A) in the impugned order read as under : "7. During the appellate proceedings the assessee submitted that it is a not-for-profit society promoted by the Govt. of India and duly registered under the Societies registration Act, 1860. It is a charit....
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....mises of the Federation Office. The assessee relied on a number of case laws, mainly on the decision in case of All India Football Federation (2015), 43 ITR 656. 8. I have gone through the Assessment order & submissions made by the assessee & the case laws quoted. The main objectives of the federation is to promote the game of wrestling both at the national and international level. The major issue of addition in the case are whether the proviso to Section 2(15) applies in view of .the receipts under the head of royalty and sponsorship fee as the assessee is involved in the activities pertaining to objects of general public utility. Secondly, whether proviso to Section l1(1)(c) applies to the assessee case as the income has been applied for payment for foreign currency to the team participants for participating in competition outside India and the approval of CBDT has not been taken. The third issue is whether telephone expenses of Rs. 42,480/- are in violation of Section 13(1)(c) r.w.s 13(3) of the Act. It is seen that the assessee is a sport body recognised by the Ministry of Youth Affairs and Sports for promotion of Wrestling in India. The AO while assessing has treated the roy....
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....d raised by the Revenue stands dismissed. " 9. It is evident that the assessee is not involved in any business activity as there is no apparent motive to earn profit. The royalty and sponsorship fees which are received are incidental for the fulfillment of the objectives of the assessee. The receipts are not being used as business receipts in order to be utilised as profit to any person but instead is used to promote the sport of wrestling. Though the assessee has objectives of general public utility, considering the activities and the objects of the federation as also going by the case laws quoted above, the proviso to Section 2(15) shall not apply to the assessee. The addition made on account of royalty and sponsorship fees may therefore be deleted. 10. Next is the issue of expenditure of Rs. 98,27,696/- incurred for purchase of foreign currency disbursed in India to the Indian team members for participation in international competition. The assessee has explained that the purchase of foreign currency was made from the agency in India. These are not the expenses of the assessee as grants are received from the Government of India. The tickets are directly given through the Gov....