TaxTMI 
TaxTMI 
2014 (3) TMI 1222
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...., IPL matches, accommodation charges, hall booking charges, swimming pool and gym charges, advertisement rights, franchise fees and subsidy etc. It was further noticed that the society has received huge amounts from certain companies as sponsorship money for naming the cricket ground/portion of the stadium in those companies' names. 3. The DIT (E) on the basis of information found during the survey and the explanation given by the Honorary Secretary of the assessee society during the survey proceedings noted that such receipts are from nature of activities covered under the first proviso to section to section 2(15) of the I T Act, hence the assessee has lost the character of a charitable society. On that basis, the DIT (E) issued a show cause notice on 17-11-2011 pointing out therein that the assessee society has lost the character of charitable trust in view of the clarification by the CBDT in circular No.11 of 2008 with regard to advancement of any other object of general public utility, hence, will not be eligible for exemption u/s 11 or u/s 10(23C), if they carry out commercial activities. The DIT therefore called upon the assessee to show cause as to why registration granted ....
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....haracteristic of an activity which is embedded in promotion of sport and not carried out with an intention to exploit commercially, cannot distort the trait of charity in the entire activity. It was submitted that to examine whether the activities carried out commercial nature or otherwise, it is essential to understand the source of revenue and the intent of generating such revenue. Explaining the nature of league fee with ground, it was submitted that many of the clubs affiliated to HCA may or may not have their own grounds and if they want to utilise the HCA's ground (Gymkhana) and other grounds obtained free or on payment, they have to pay a nominal amount apart from their annual subscription. This activity facilitates promotion of cricket and such amount collected as fee do not partake the character of service for a fee. It was stated that HCA does not carry on trade, commerce or business in this regard. Referring to the item, league fee without ground, it was submitted that this is similar to the earlier one, except that the scale of fee slightly differs in the case of teams who do not have their own ground. It was stated that this forms part of the annual subscription payabl....
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....explanation. The DIT (E) was of the view that the sponsorship money received from various Corporate Bodies like Visakha International Stadium and M/s GMR Hyderabad International Airport etc., constituted commercial activities. The DIT (E) was of the view that the assessee was engaged in the activities which are not in consonance with the objects of the Society. Referring to the sale of corporate boxes, the DIT (E) noted that the assessee has been providing corporate boxes over period years for a consideration and such activity has been carried out with a commercial motive. Referring to in-stadia advertising rights, the DIT (E) noted that over a period of years, the assessee was receiving amounts by way of in-stadia advertisement rights in the process of inviting tenders which is nothing but a commercial activity. Referring to the receipts towards TV subsidy, the DIT (E) noted that the assessee society was receiving over a period of years substantial amounts towards TV subsidy which is purely towards a commercial right. With regard to revenue earned from holding IPL matches, the DIT (E) observed that over a period of years, the assessee society has been receiving substantial amounts....
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....orted by vouchers and expenditure incurred on tournament conducted for Women Cricket but they were never pointed out in show cause notice issued. Therefore, the assessee was deprived of an opportunity to explain these issues to the DIT (E). It was submitted that the cricket stadium will not be complete without adequate infrastructure facilities to the visiting players and officials from various places. The objects before the amendment already covers creation of such club and facilities as part of its objects to promote cricket by establishing and acquiring or creating such facilities as may be required. The subsequent amendment was only to make it more explicit. It was submitted, had the DIT (E) given a reasonable opportunity to the assessee to explain these objects, then the doubts created in his mind could have been removed. Similarly, with regard to DIT (E)'s conclusion in respect of expenses incurred without supporting vouchers, it was submitted, reference to the auditor's report by the DIT (E) is totally incorrect as the auditor's report does not indicate any inconsistency in the nature of expenditure incurred. The observation in the auditor's report referred to by the DIT (E)....