TaxTMI 
TaxTMI 
2026 (7) TMI 186
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....vely in the case BCCI (2) On the facts, and in the circumstances of the case, and in law, the Commissioner of Income Tax (Appeals) erred in deleting U.S. $ 1.16 crores from the income of PILCOM on the ground that PILCOM was to act as a Manager of the appellant (BCCI) and Pakistan Cricket Board. (3) On the facts, and in the circumstances of the case, and in law, the Commissioner of Income Tax (Appeals) erred in deleting the addition of U.S. $ 67.79 lakhs made on account of surplus as per Receipt & Expenditure details of Citibank, London and addition of U.S. $ 2 lakhs made on account of accrued interest, holding that the said amount is already included in the amount of U.S. $ 4.85 lakhs in Citibank, London Account of PILCOM. (4) On the facts, and in the circumstances of the case, and in law, the Commissioner of Income Tax (Appeals) erred in deleting addition of U.S.S 93,92,092/- being surplus on account of 37 matches of World Cup, 1996 stating that PILCOM does not come into picture at all as far as income from 37 matches is concerned. 3. Facts of the case are that the assessee is a stated to be Non-profit society duly registered under societies Registrat....
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....ccount of such common pool receipt and expenses. The said committee was treated as an Association of Persons (A.O.P) by the concerned assessing officer at Calcutta and the entire income from the said World Cup Tournament was sought to be assessed in the hands of PILCOM. But the said effort of the assessing officer at Calcutta was defeated by the order of the ITAT, Calcutta dated 30.3.98 wherein it was clearly held that the PILCOM it not an A.O.P. The assessing officer of the appellant also following closely in the foot steps of its Calcutta counterpart has treated the PILCOM as an independent entity which was liable for tax liability in respect of the income arising from the Wills World Cup1996. The income of the PILCOM was worked out mostly on estimate basis and on the basis of some details requisitioned by the assessing officer during assessment proceedings in the case of the appellant. As the appellant was responsible for the conduct of cricket matches of the Wills World cup 1996 in India the income of the PIL.COM was added to the income of the appellant on protective basis. No reasons are given by the assessing office for such a protective addition in the assessment order, but ....
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....ising Rights. The outflow from such joint account would be payment of guarantees, International Air Travel (except such costs that would be borne by Sri Lanka) expenses incurred on the delegates of different countries who would come as guests to watch the Semi-Finals and the Final, as well as other expenses in foreign exchange, such as import of cricket balls, third country umpires, administrative expenses to the teams pre-bid expenses, as well as the travelling expenses of the members of the Joint Management Committee for their authorised trips, establishment expenses for the office of the Convenor-Secretary and the Treasurer and the like. It was agreed that the surplus/deficit accruing from such joint account would be shared in equal proportion by the Cricket Boards of Pakistan & India" It was agreed that the Sri Lanka Board would not share the profit/loss accruing from then tournament, bot would confine itself tothe surplus/deficit accruing from the matches that would be hosted by them. Their revenue would also include internal TV rights from such matches. Earnings from external TV rights would be retained by the Cricket Board of Pakistan & India, in view of their forei....
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.... also incorporated in the regular accounts of the appellant and naturally all the receipts and expenses pertaining to that particular leg of World Cup Tournament are duly incorporated in its regular accounts and the same are disclosed in the Return of income. 4. The assessing officer has proceeded on the reasoning that PILCOM is an independent assessable entity and being an A.O.P. comprising the representatives of 3 Cricket Boards should be the sole recipient of the entire income flowing from the Wills World Cup, 1996. The income attributable to the Indian operation of Wills World Cup which was incorporated by the appellant in its regular account and returned income also are considered by the assessing officer to be the income of the PILCOM and not that of the appellant. It is clearly mentioned in Para 9.2 of the assessment order that Wills World Cup, 1996 was organised by PIL.COM which is a different entity and as such any income from Wills World Cup cannot be considered as part of the income of BCCI. Therefore, the assessing officer while retaining the income pertaining to the Wills World Cup in the hands of the appellant on provisional basis has proceeded to compute the....
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....above addition on various grounds:- i) The appellant objected to the exclusion of income pertaining to the Wills World Cup which was incorporated in its account and returned income. ii) It was pointed out that the surplus pertaining to Wills World Cup amounting to Rs. 23.42 crores as reflected in the accounts of the appellant was excluded and side by side Rs. 8.32 crores out of the said surplus was again included in the computation of income in Para 9.2 of the assessment order. The surplus of Rs. 2.33 crores worked out by the appellant in Para 9.2 is inclusive of the receipt of Rs. 8.42 crores pertaining to Wills World Cup. iii) The appellant objected to the finding of the assessing officer that PILCOM is an AOP. The said finding is against the order of the Calcutta ITAT, dated 30.3.98. iv) As the PILCOM is not an independent entity as per the said order of Calcutta ITAT. it was also not capable of having any income of its own. v) The inclusion of the surplus in respect of the matches played outside India in the income of PIL.COM was totally unjustified because, the surplus arising from these 20 cricket matches was appropriated by the Cr....
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....ddition by assessing officer on account of interest on deposit in Citi Bank London was unjustified because already an amount of 4.85 lakh US S is credited to the account of PIL.COM by the said bank as interest. Such an addition on account of interest on estimated basis amounts to double addition because the credit balance in the account of PILCOM in City Bank London is also added by the assessing officer in full. x) The inclusion of income of 37 Cricket matches in the total income of PILCOM is highly unjustified because, the PILCOM has not received a singly penny out of the conduct and organisation of these 37 cricket matches. The respective Cricket Boards of India, Pakistan & Sri Lanka have organized and managed the 37 cricket matches and the receipts flowing there from were fully appropriated by them. xi) The appellant also objected to the computation of surplus on 37 matches on average basis. The basis of computation is the surplus declared by the appellant in respect of 27 matches played in India. The said surplus is 23.42 crores which includes the Sponsorship fee of Rs. 18.60 crores, Guarantee fee of Rs. 1.25 crores, and amount received by the appellant by wa....
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.... pointed out by the appellant in the computation of income in the assessment order are by and large correct and gets substantiated from various details available in the assessment records itself. 8. The audited accounts furnished by the appellant in the course of assessment proceedings provide a very clear picture of the accounting of various receipts and expenses pertaining to the Wills World Cup 1996. The total receipts from Wills World Cup was Rs. 48.68 crores and the expenses are Rs. 25.03 crores. These are included in the account of the appellant and a detailed break up of these receipts and expenses is available in the various Schedules forming part of the audited accounts of the appellant. The income relating to World Cup as well as the expenses are reflected in the Schedule-1 and therein the receipt by way of Title Sponsorship fees, Interim Distribution of income & Guarantee money are duly reflected. The income item material for consideration in the appellate proceedings are "Event and other Sponsorship amounting to Rs. 19.13 crores, Interim Distribution of income amounting to Rs. 7.06 crores & Guarantee Money amounting to Rs. 1.25 crores. Detailed break up of thes....
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....Judgement dated 30.3.98. There it has been clearly held that the essential ingredients of an AOP that is joining together for the purpose of earning profit is totally exempt in the constitution of PILCOM and therefore, it cannot be considered to be an AOP. Secondly, the PILCOM is only a sort of management committee comprising of the nominees of ICC and Cricket Board of India. Pakistan and Sri Lanka. It was entrusted with the limited responsibility for maintaining the account of common receipts and expenses and to facilitate the coordination among the 3 Cricket Boards and the ICC for the smooth conduct of Wills World Cup. Therefore, to treat the PILCOM as an independent assessable entity and to compute its income in respect of all the cricket matches of Wills World Cup 1996 was erroneous. In fact, the PILCOM being only a management committee could not have earned any income and whatever was received by it was only for defraying certain common expenses and surplus if any remaining was to be allocated between the appellant and the Pakistan Cricket Board. Thus, PIH.COM was not entitled to earn or receive any income out of the Wills World Cup 1996 match. Therefore, the computation of th....
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....es US S in the income of the PILCOM was totally unjustified and without any basis. A part of the said amount i.e. 45% of the Title Sponsorship fee is reflected in the account of the appellant and the balance 45% has been paid to Pakistan Cricket Board after deduction of tax at the appropriate rate. How is the amount which was not received or receivable by a person can become his income? Only 10% of the sponsorship fee was passed on to PIL.COM and that too for meeting common expenses relating to Wills World Cup 1996. Even in disbursement of the said amount the PILCOM was to act only as a Manager of the appellant and the Pakistan Cricket Board and was bound to spend the said amount in accordance with the directions. Therefore, this amount of 1.16 crores US $ is wrongly included in the income of the PILCOM and the same is hereby deleted. 13. The addition on account of accrued interest of 2,00,000 US $ is wholly unjustified because, the interest due on the credit balance of PILCOM amounting to 4.85 lakhs US $ is already included in the Citi Bank London Account of PILCOM. It seems that the assessing officer has not perused the said account carefully, otherwise, he would not hav....
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....the contract entered into between the Cricket Boards of India, Pakistan and Sri Lanka. The appellant was liable to pay tax only in respect of the surplus derived out of the matches played in India and the income arising out of the matches played outside India cannot be subjected to Indian Income tax. According to section 5, only the income received or receivable by any Indian Resident or accruing or arising to any Indian Resident is taxable as per Income Tax Act. But, in the instant case not even a single penny out of the income from 20 cricket matches played outside India is received or receivable by the appellant: It has been fully illustrated earlier that not even a single penny of income is receivable by the so called A.O.P. which is generated out of the matches played in India or outside. Whatever is received by the appellant or receivable is reflected in its regular accounts and the entitlement to receive any further sum on account of organizing the tournament of World Cup 1996 is depending upon the terms of financial arrangements arrived at between the Cricket Boards of 3 countries. As per the said agreement the appellant is entitled to receive only the income from cricket m....
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..... He did not consider the important fact that the accounts of the PILCOM were not audited and could not be considered reliable and authentic. 6. Pre contra, the Sr.Counsel appearing for the assessee at the outset submitted that the Department had filed writ for various assessment years including the relevant assessment year before the hon'ble Bombay High Court which are still pending. However, he added the issue involved herein could be adjudicated as it mainly involves additions made by the AO on protective basis in the hands of the assessee though, he intimated that no substantive addition was made any other case. It was also informed that no stay was in force by the hon'ble Court preventing the Tribunal to proceed and adjudicate the impugned matter. The ld.CIT(DR) did not controvert the contentions. 6.1 The ld.AR further submitted that the issue of exemption u/s 10(23) of the Act which was duly allowed by the appellate authority was not the issue for consideration as the grounds of appeal do not contain any such ground. He placed on record the assessment order passed by the AO for the relevant assessment year in the case of BCCI dated 31.03.2004 in which the claim of such ....