2020 (5) TMI 395

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ified in disallowing expenditure being contribution to Cricket Academy amounting to Rs. 1,55,00,000/- u/s 37 of the Income Tax Act, 1961 (Act). 3. The assessee is a company. Its main activity is to act as franchise of Board of Control for Cricket in India (BCCI)- Indian Premier League (IPL) which organizes T-20 format cricket matches. It owns cricket team in the name and style of M/s Royal Challengers, Bangalore which participates in the IPL league matches. The assessee entered into an agreement dated 14-09-2011 with Karnataka State Cricket Association (KSCA) who wanted to establish an Academy which will provide high quality cricket education with holistic development and training, coaching etc. As per the agreement (clause 4.3) it was agr....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....er the agreement between the assessee franchise -RCSPL (Assessee) which will have exclusive naming rights in the nature of exclusive rights for branding and leveraging the academy for the purpose of branding and promotion. Further, the assessee will have the first right to sign the contract, to recruit any player for its franchisee. 3.3. Following conclusions can be drawn on the basis of above discussions: 1. Firstly, it is not clear whether the Academy was fully operational during the year. 2. Secondly, the investment that the company has made is going to provide enduring benefits as it is clear from the exclusive rights for branding and player rights arising to the company. This whole expenditure of contribution towards academy is n....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ade a contribution of Rs. 45 lakhs to Karnataka State Cricket Association(KSCA) for the purpose of creating cricket academy. The assessee was also a franchisee of BCC-IPL, which owns Royal Challengers Bangalore Team and is also owner of a cricket team and had commercial interest in the game of cricket. This contribution was made in terms of agreement with Karnataka State Cricket Association. The objectives for which the cricket academy was set up are as under; Objectives of the Academy (as per clause- 2 of the agreement) - To provide high quality cricket education within a holistic development program - To enhance the standards of coaching across the state by introducing techniques such as Cognitive Video based coaching to cricket dev....