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2019 (1) TMI 1652
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....ssed for want of prosecution. 4. Grievance raised by the assessee, in ground no. 2, is as follows: The learned CIT(A) has erred in law and on facts in holding that the Section 11 of the I.T. Act is not applicable to the assessee's case and denying the various reliefs as per the law. 5. As far as this grievance of the assessee is concerned, it is sufficient to take note of the fact that section 11 was held to be inapplicable as registration under section 12AA was cancelled. There was no other reason for denial of benefit under section 11. Learned representatives, therefore, fairly agree that since the registration has been restored, vide order dated 31st March 2012 passed by a coordinate bench of this Tribunal, the applicability of Section 11 will follow. We, therefore, uphold the plea of the assessee, and direct the Assessing Officer to grant the consequential relief. 6. Ground no. 2 is thus allowed. 7. In ground no. 3, the assessee has raised the following grievance: The learned A.O. and Hon'ble CIT(A) has erred in law and on facts in not granting deduction of capital expenditure of Rs. 93,20,615/ - as claimed in the statement of income attached to th....
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...., and, therefore, the corpus donation received by the assessee, though termed as TV Rights, is not taxable. The Assessing Officer noted this contention as also the fact that under section 11(1)(d), what cannot be included as total income of the assessee is "income by way of voluntary contributions made with a specific direction that they shall form part of the corpus of the trust or the institution". The Assessing Officer was of the view that what has been paid to the assessee is a share out of earnings by the BCCI, out of proceeds of sale of TV right s, and is, as such, taxable as income of the assessee. It was observed that it cannot be said to be voluntary contribution by the BCCI . The Assessing Officer also shows that as accepted by the auditor of the company the amount is relatable to the TV right s and it cannot, therefore, be treated as voluntary contribution in the nature of corpus donations. He also noted that as registration of the assessee, under section 12AA, stands cancelled, the assessee is anyway not eligible for the benefit of Section 11(1)(d). On the basis of this line of reasoning, the Assessing Officer treated the said amount of Rs. 1,58,00,000 as income of the ....
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....otal income. We are unable to find any legal support for learned CIT(A)'s stand that each donation must be accompanied by a separate written document. The contribution has to be voluntary and it has to be with specific direction that it will form corpus of the trust'. These conditions are cl early satisfied. Any payment which the assessee is not under an obligation to make, whatever be the mode of its computation, is a voluntary payment, and, any payment which is with a specific direction that it for corpus fund is a corpus donation. In our considered view, even without the two specific confirmations filed by the assessee, in the light of the BCCI resolution under which the payment is made and in the light of the payment not being under any legal obligation, the conditions under section 11(1)(d) are satisfied. We, therefore, uphold the plea of the assessee. The Assessing Officer is accordingly directed to delete this addition of Rs. 1,58,00,000. 16. Ground no. 4 is thus allowed. 17. In ground no. 5, the assessee has raised the following grievance: The learned CIT(A) has erred in law and on facts in not granting deduction of 15% of income being Rs. 32,38,724/- as comp....
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....in which year the depreciation was claimed, the entire expenditure incurred for acquisition of capital assets was treated as application of income for charitable purposes under Section 11(1)(a) of the Act. The view taken by the Assessing Officer in disallowing the depreciation which was claimed under Section 32 of the Act was that once the capital expenditure is treated as application of income for charitable purposes, the assessees had virtually enjoyed a 100 per cent write off of the cost of assets and, therefore, the grant of depreciation would amount to giving double benefit to the assessee. Though it appears that in most of these cases, the CIT (Appeals) had affirmed the view, but the ITAT reversed the same and the High Courts have accepted the decision of the ITAT thereby dismissing the appeals of the Income Tax Department. From the judgments of the High Courts, it can be discerned that the High Courts have primarily followed the judgment of the Bombay High Court in 'CIT v. Institute of Banking Personnel Selection (IBPS)'[2003] 131 Taxman 386. In the said judgment, the contention of the Department predicated on double benefit was turned down in the following manner: ....
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.... depreciation. It was held that income of a Charitable Trust derived from building, plant and machinery and furniture was liable to be computed in normal commercial manner although the Trust may not be carrying on any business and the assets in respect whereof depreciation is claimed may not be business assets. In all such cases, section 32 of the Income-tax Act providing for depreciation for computation of income derived from business or profession is not applicable. However, the income of the Trust is required to be computed under section 11 on commercial principles after providing for allowance for normal depreciation and deduction thereof from gross income of the Trust. In view of the aforesatated judgment of the Bombay High Court, we answer question No. 1 in the affirmative i.e., in favour of the assessee and against the Department. 4. Question No. 2 herein is identical to the question which was raised before the Bombay High Court in the case of Director of Income-tax (Exemption) v. Framjee Cawasjee Institute [1993] 109 CTR 463. In that case, the facts were as follows: The assessee was the Trust. It derived its income from depreciable assets. The assessee took into ac....
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....er. 25. Ground nos. (i) to (iv) are thus dismissed. 26. In ground no. (v) the Assessing Officer has raised the following grievance: Although the issue of T.V. Rights received from BCCI has been decided by the CIT(A) in favour of the Department and has been held as the income of the Assessee, however, the letter of the BCCI dated 21/01/2013, filed before its Assessing Officer, ACIT, Central Circle-32, Mumbai, clearly states that the said payment of TV Rights to the GCA and the various State cricket associations is part of the revenue sharing arrangement between BCCI and the State Cricket Associations on sale of media rights, was not considered which makes department stand even stronger. The relevant portion of the abovereferred letter is as under:- "PAYMENT TO STATE ASSOCIATIONS During the year, BCCI has paid amounts to the state associations under the head "T.V. Subventions to Associations". This represents payment of 70% of the revenue from sale of media rights to the state associations. (emphasis supplied) Whenever a foreign team visits India, the international matches such as Test and ODI are allotted by BCCI to the state cricke....
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....ed by the CIT(A) in favour of the Assessing Officer and this ground of appeal does not, therefore, call for any adjudication. As regards the argument raised therein, suffice to say, as we have said in so many words while dealing with the grievance of the assessee on this point, that mechanism of computing voluntary contribution is irrelevant and as long as the contribution is not under any legal obligation, it is required to be treated as voluntary contribution. This letter, even though it makes out a case for higher contribution, does not create a legal obligation. We, therefore, even on merits, reject the plea of the appellant Assessing Officer. 28. Ground no. v is thus dismissed as infructuous. 29. Ground nos vi and vii are general in nature and donot call for any adjudication. 30. In the result, the appeal of the Assessing Officer for the assessment year 2004-05 is dismissed. 31. To sum up, while the appeal of the assessee for the assessment year 2004-05 is partly allowed in the terms indicated above, the appeal of the Assessing Officer for the assessment year 2004-05 is dismissed. 32. We now take up the cross appeals for the assessment year 2005-06. 33. We wi....
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....d remit the matter to the file of the Assessing Officer for adjudication on merits. 41. Ground no. 3 is thus allowed for statistical purposes. 42. In ground no. 4, the assessee has raised the following grievance: The learned CIT(A) has erred in law and on facts in holding that amount of Rs. 1,60,00,000 received as donation to corpus from BCCI is not exempt, since the provisions of section 11(1)(d) were not complied by the appellant. 43. An identical grievance also came up for our adjudication in the assessment year 2004-05 earlier in this consolidated order. We have upheld the plea of the assessee and observed as follows: 12. So far as this grievance of the assessee is concerned, the relevant material facts are like this. The assessee before us is a cricket association, registered under the Societies Registration Act 1860, and is engaged in promotion of cricket in specified areas of Gujarat State. In the course of the reassessment proceedings, the Assessing Officer noted that assessee has received a sum of Rs. 1,58,00,000 from the Board of Cricket Control of India (BCCI, in short) as towards the TV rights. When he probed the matter further, it was explain....
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.... the donation from the donor. In absence of written direction, for a donation in a given assessment year, a donation would not be considered as a corpus donation and the organization (in this case, GCA) would not be entitled to claim full exemption. To add, donation covered by a written document but without any speci fic direction cannot be claimed as corpus donation 13. The assessee is not satisfied and is in further appeal before us. 14. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. 15. We find that, at pages 46 and 47 of the paperbook, the assessee has filed specific confirmations to the effect that these amounts were corpus donations. We have also perused the BCCI resolution no 5 dated 29th September 2001 which specifically states that the TV subsidies should henceforth be sent to the Member Associations towards "corpus funds". There is no dispute that the TV subsidy in question is sent under this resolution. On these facts, and in the light of the provisions of Section 11(1)(d) which only require the income to be "by way of voluntary contributio....
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.... the assessment year 2005-06. 51. We find the grievances raised in this appeal are exactly the same as in the assessment year 2004-05. Learned representatives fairly agree that whatever we decide for the assessment year 2004-05 will apply mutatis mutandis here as well. 52. While dealing with these grievances for the assessment year 2004-05, and for the detailed reasons set out earlier in this order, we have rejected the appeal of the assessee. The grievances of the appellant being verbatim the same, we see no reasons to take any other view of the matter for this assessment year as well. Respectfully following our views above, we reject the grievances of the appellant and confirm the relief granted by the CIT(A). No interference is called for. 53. In the result, the appeal of the Assessing Officer for the assessment year 2005- 06 is dismissed. 54. To sum up, while appeal of the assessee for the assessment year 2005-06 is partly allowed in the terms indicated above, the appeal of the Assessing Officer for the assessment year 2005-06 is dismissed. 55. We now take up the cross appeals for the assessment year 2006-07 56. We will first take up the appeal of the assessee....
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....sing Officer for adjudication on merits. 64. Ground no. 3 is thus allowed for statistical purposes. 65. In ground no. 4, the assessee has raised the following grievance: The learned CIT(A) has erred in law and on facts in holding that amount of Rs. 3,45,00,000 received as donation to corpus from BCCI is not exempt, since the provisions of section 11(1)(d) were not complied by the appellant. 66. An identical grievance also came up for our adjudication in the assessment year 2004-05 earlier in this consolidated order. We have upheld the plea of the assessee and observed as follows: 12. So far as this grievance of the assessee is concerned, the relevant material facts are like this. The assessee before us is a cricket association, registered under the Societies Registration Act 1860, and is engaged in promotion of cricket in specified areas of Gujarat State. In the course of the reassessment proceedings, the Assessing Officer noted that assessee has received a sum of Rs. 1,58,00,000 from the Board of Cricket Control of India (BCCI, in short) as towards the TV rights. When he probed the matt er further, it was explained by the assessee that nomenclature of th....
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....f written direction, for a donation in a given assessment year, a donation would not be considered as a corpus donation and the organization (in this case, GCA) would not be entitled to claim full exemption. To add, donation covered by a written document but without any specific direction cannot be claimed as corpus donation 13. The assessee is not satisfied and is in further appeal before us. 14. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. 15. We find that, at pages 46 and 47 of the paperbook, the assessee has filed specific confirmations to the effect that these amounts were corpus donations. We have also perused the BCCI resolution no 5 dated 29th September 2001 which specifically states that the TV subsidies should henceforth be sent to the Member Associations towards "corpus funds". There is no dispute that the TV subsidy in question is sent under this resolution. On these facts, and in the light of the provisions of Section 11(1)(d) which only require the income to be "by way of voluntary contributions made with a specific direction that they....
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....find the grievances raised in this appeal are exactly the same as in the assessment year 2004-05. Learned representatives fairly agree that whatever we decide for the assessment year 2004-05 will apply mutatis mutandis here as well. 75. While dealing with these grievances for the assessment year 2004-05, and for the detailed reasons set out earlier in this order, we have rejected the appeal of the assessee. The grievances of the appellant being verbatim the same, we see no reasons to take any other view of the matter for this assessment year as well. Respectfully following our views above, we reject the grievances of the appellant and confirm the relief granted by the CIT(A). No interference is called for. 76. In the result, the appeal of the Assessing Officer for the assessment year 2006- 07 is dismissed. 77. To sum up, while appeal of the assessee for the assessment 2006-07 is partly allowed in the terms indicated above, the appeal of the Assessing Officer for the assessment year 2006-07 is dismissed. 78. We now take up the cross appeals for the assessment year 2007-08. 79. We will first take up the appeal of the assessee for the assessment year 2007 - 08. 80. G....
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....s to us, there was no specific ground of appeal on this issue. There was, however, no adjudication on this aspect. Learned counsel now urges us to admit the specific ground of appeal, as above, in terms of Hon'ble Supreme Court's judgment in the case of National Thermal Power Corp Ltd Vs CIT (229 ITR 383) and remit the matter to the file of the Assessing Officer for adjudication on merits. 89. Having heard the rival contentions and having perused the material on record, we see merits in the plea of the learned counsel. In the li ght of Hon'ble Supreme Court's judgment in the case of NTPC (supra), we admit this ground of appeal, and remit the matter to the file of the Assessing Officer for adjudication on merits. 90. Ground no. 4 is thus allowed for statistical purposes. 91. In ground no. 5, the assessee has raised the following grievance: The learned CIT(A) has erred in law and on facts in holding that amount of Rs. 17,58,00,000 received as donation to corpus from BCCI is not exempt, since the provisions of section 11(1)(d) were not complied by the appellant. 92. An identical grievance also came up for our adjudication in the assessment year 2004-05 earlier in ....
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....subsidy is given to the Member associations as corpus donation. The CIT(A), identified the core issue for adjudication as follows: "the fundamental question which now arises is whether the specific direction once issued is sufficient for the purpose of section 11(1)(d) or specific direction is required for each year individually". He then proceeded to answer this question by observing as follows: As per section 11(1)(d), a written specific direction is necessary to claim it as corpus donation. For a donation as a corpus donation, a written document with specific direction from the donor should be obtained and should accompany the donation from the donor. In absence of written direction, for a donation in a given assessment year, a donation would not be considered as a corpus donation and the organization (in this case, GCA) would not be entitled to claim full exemption. To add, donation covered by a written document but without any specific direction cannot be claimed as corpus donation 13. The assessee is not satisfied and is in further appeal before us. 14. We have heard the rival contentions, perused the material on record and duly considered facts of ....