TaxTMI 
TaxTMI 
2017 (4) TMI 1670
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....1. Whether, on the facts and in the circumstances of the case and in law, the Ld. CIT(A), erred in directing the A.O. to treat the expenditure on account of Franchise fees of Rs. 44.76 Crore paid to BCCI for Rights to participate in the Indian Premier League (IPL) as revenue expenditure instead of capital expenditure for the A.Y. 2011-12 relying on the decision of the Hon'ble ITAT in assessee's own case for A.Y. 2009-10 & 2010-11? 2. Whether, on the facts and in the circumstances of the case and in law, the Ld. CIT(A), erred in directing the A.O. in treating the expenditure on account of Franchise fees of Rs. 44.76 Crore paid to BCCI for Rights to participate in the Indian Premier League (IPL) in the lights of amendment t....
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.... wherein exactly similar issue decides by the Tribunal in assessee's favour after observing as under:- "Before considering the claim of allowability of deduction, it is necessary to decide whether the aforesaid franchisee right is a capital asset eligible for depreciation or it is revenue expenditure. As per clause 3 of the FA, the impugned agreement shall come into effect upon signature and shall continue for so long as the League continues subject to termination, suspension or renewal as provided (the 'Term'). As per clause 4 of the FA, the franchisee (appellant) has acknowledged and agreed that BCCI-IPL owns the Central Rights and the BCCI has all pervasive rights to exploit present as well as future Central Rights. The Central ....
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....We agree with the above order of the Ld. CIT (A) as the amount was not for acquiring capital rights. It is for conducting the matches on years basis. If assessee has not paid the amount, it loses the right to conduct the matches. Accordingly, the Ld. CIT (A) has come to correct conclusion that the right acquired by the assessee is not a perpetual right and the expenditure paid on yearly basis is revenue expenditure. 6.1. He also analysed various case law vide para 5.3.4 and 5.3.5 as under:- "Against the above factual ground, the issue for adjudication is whether the above franchisee right constitute capital asset entitled to depreciation. No doubt, section 32(1) includes franchisee right as part of the intangible assets en....
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.... for the right to use these assets are revenue expenditure. They would not be treated as capital assets entitled to depreciation on the annual lease payments. Rental payment in respect of building, which are fixed assets, taken on lease would constitute revenue expenditure. Whatever may be the period of lease, the annual payment will be only revenue in nature. In fact the Madras High Court in the case of CIT v. Gemini Arts (P) Ltd. 254 ITR 201, following the Apex Court in CIT v. Madras Auto Services Pvt. Ltd. 233 ITR 468 (sq, has held that upfront payment of future rent for 47 years would still be revenue expenditure. (iii) In the case of lease of immovable property, the Supreme Court has held that any premium paid for acquisition ....