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TMI Blog2014 (2) TMI 258X X X X Extracts X X X X X X X X Extracts X X X X ..... riction of disallowance u/s 57(iii) of the Act - Expenditure claimed against earning of match fees – Held that:- AO was not justified in disallowing the entire expenditure on the reason that being a popular cricketer and was also captain of Indian cricket for several years no expenditure would be incurred by the cricketer and all expenses were borne by the BCCI - CIT(A) has erred in restricting the amount to 50% of the claim - in the earlier year also, he has examined the expenditure incurred by the assessee and considered 20% of the amount only to be disallowed - Since assessee has accepted such disallowance in earlier year, it is reasonable to restrict the disallowance to 20% of the claim as in earlier year to be consistent with the facts of the case - the order of the CIT(A) modified and claim of expenditure is allowed subject to disallowance at 20% - Decided partly in favour of Assessee. Deduction u/s 80RR of the Act – Amount received towards advertisement for acting in ad-movies – Held that:- The CIT(A) got carried away by the role of assessee as cricketer - Even though assessee may be reputed cricketer, for acting in T.V./ print media, it requires special talent – Even tho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Bank and also for the Country. In the return, he has shown income from salary, house property, professional income and other sources. The assessee claimed certain amounts of Rs.9,42,644/- as exempt from income tax in view of Board circular No.447/199/1/86IT(A1) dated 22.01.1986 with respect to net prize money received from various cricket tournaments at Rs.6,19,067/-, awards and gifts of Rs.23,577/- and Man of Match awards of Rs. 3 lakhs. The A.O. did not allow the claim of the assessee for exemption on the reason that in case of sportsman who is a professional, awards received by him shall be in the nature of benefit in exercise of his profession and therefore, liable to tax under the Income Tax Act. The assessee contended that he is not a professional cricketer and he is playing for the country under the aegis of BCCI which decides payments to be made to the players by way of fees, logo amount, share of prize money etc., and he has no control over the matches played and amounts received. This explanation of the assessee was not found acceptable to the A.O. who held that cricket played by the assessee is his profession. The assessee carried the matter to the learned CIT(A) who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the assessee failed to explain as to how this is an allowable expenditure against Logo income. 8. Before the CIT(A), it was stated that on many occasions, equipment like pads, gloves, bats. etc., are taken away by the fans, grounds men etc as memorabilia. Because of this reason huge expenditure was incurred for his practice and playing the matches. It was further submitted that the CBDT Circular NO.1432 issued in 1981 though has been withdrawn, has given benefit to cricket players to the extent of 75% of the amount received. Even though the circular was withdrawn, the CBDT has accepted the claim of the cricket players that they have to incur huge expenditure to continue to play cricket in the national and international level and a deduction to the extent actually incurred for the purpose of cricket to be allowed u/s 57(iii) of the I.T. Act. In addition to this, the Counsel has also cited the judgement of Supreme Court in the case of Seth R. Daimia Vs. CIT (1977) 110 ITR 644 before the learned CIT(A). 9. Learned CIT(A) asked the assessee to furnish details of expenses incurred and noticed that out of total deduction of Rs.18,86,445/- claimed, only an amount of Rs.8,75,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Rs.19,93,782/- by saying that all the requirements of the cricketers such as dress, equipment, coaching, training, travel, stay etc., were looked after by the BCCI which is the supreme body for cricket control in India. The senior cricketers get their choice of wear and equipment. Hence, it is difficult to believe that the Assessee would have incurred any expenditure for playing cricket under the aegis of BCCI for the country. AO has further mentioned that the examination of ledger account of the expenditure does not reveal even a single entry of payment towards buying of cricket equipment. Most of the expenditure has been incurred in cash. The cash vouchers along with bills etc., were not produced for verification. In such circumstances, the entire expenditure of Rs.19,93,782/- has been disallowed and added back to the income. 14. Learned CIT(A) after considering the detailed submissions of the assessee decided the issue as under : "10. I have carefully considered the arguments of the learned counsel and have also gone through the facts narrated in the assessment order. During the year the appellant received following amounts towards playing cricket matches and tournaments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The appellant, on the other hand, has contended that in order to play national or international level of cricket every player need to practice and train for long hours each day. The players have to travel to different places and incur substantial amount towards travel, special diet, trainers and support staff in addition to buying equipment on continuous basis. The appellant could not maintain pucca vouchers due to deep involvement in the game and also due to prevailing conditions under which the equipment was acquired. After considering the arguments of the appellant, I am of the opinion that the A.O. was not justified in disallowing the entire expenditure of Rs.19,93,782/-. The appellant is a popular cricketer and was the captain of Indian Cricket Team for several years. The A.O. is not at all justified in saying that no expenditure is incurred by the cricketer and all the expenses are borne by the BCCI. Before participating in the national and international test matches the player has to do a lot of practice in which he has to incur some expenditure on travelling and buying play equipment like bats, gloves, pads, shoes etc., Keeping in view the fact that major payments have be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- 19. It was claimed that the assessee is entitled to deduction u/s. 80RR as a professional actor in ad-films and not as a sportsman. As a cricketer for the country the assessee gained popularity with the masses and, therefore, decided to act in movies, in particular ad-films. He has taken crash courses in acting to position himself in the ad-films market by improving acting skills and talent and enhance star value. Accordingly, the assessee decided to act in ad-films for Ramolene Suitings, SG Sports Kit, Pepsi, Dunkans Tea etc., Observing his popularity and success in ad-films, certain foreign companies like Reebok International sought his services for acting in their ad-films. During the year M/s. Reebok International, a sports wear company paid remuneration for acting in their ad-films. Assessee is, therefore, entitled to deduction under section 80RR of the I.T. Act. The A.O. did not agree with the claim made by the assessee on the ground that being a popular cricket player he received offer for acting in ad- films for promoting goods manufactured by companies like Pepsi Foods Limited, Reebok International Limited and Bridgestone Tyres. The assessee being an employee of SBI c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee furnishes a certificate, in the prescribed form, along with the return of income, certifying that the deduction has been correctly claimed in accordance with the provisions of this section.]" 15. The remuneration received from acting in ad- films or certain companies be termed as income derived in exercise of his profession. Last year the appellant claimed himself as a non- professional cricketer for claiming certain gifts and awards as exempt in view of Board's circular No.447 dated 22.09.1986. following the decision of Bangalore Bench of ITAT in the case of GR Viswanath vs. Fifth Income Tax Officer reported in 29 ITD 142, the c held that the appellant is not a professional cricketer and the amounts received towards prize money, awards and gifts etc., were held to be exempt as per Board's Circular dated 22.9.1986. When the appellant has been held to be a non-professional cricketer he cannot claim himself to be a professional actor or a model for the purpose of claiming deduction u/s.80RR of the I.T. Act. Certain foreign companies sought his services to act in ad-movies for promoting their goods just because he was a popular cricketer and not as a professional actor or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ource for various advertisements, in convertible foreign exchange. There in also, the A.O. rejected the claim on the reason that assessee was not a professional cricketer and income from modelling on advertisements was not derived from exercise of his profession. The Coordinate Bench of ITAT, Mumbai in the case of Sachin R. Tendulkar (supra) held as under : "The assessee while appearing in advertisements and commercials, had to face the lights and camera. As a model, the assessee brought to his work a degree of imagination, creativity and skill to arrange elements in a manner that would affect human senses and emotions and to have an aesthetic value. No doubt, being a successful cricketer, it had added to his brand value as a model. But the fact remained that the assessee had to use his own skills, imagination and creativity. Every person or for that matter every sportsman does not possess that degree of talent or skill or creativity and face the lights and camera etc., Thus, considering the totality of the facts of the case, it was the considered opinion that the income received by the assessee from modelling and appearing in T.V. commercials and similar activities could be te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... V, dated 16.08.2004. Grounds No. 2 and 3 of the assessee pertain to disallowance of expenditure of Rs.9,50,000/- claimed against the income on logo money of Rs.15,71,310/- assessed under the head "other sources". This issue was recurring and CIT(A) without referring to the predecessor orders on the issue confirmed the disallowance made by the A.O. This issue was also discussed in earlier two assessment years i.e., A.Y. 1998-99 and 1999-2000 and consistent with the stand taken therein, we allow the claim of the assessee, subject to disallowance of 20% of the claim as was done in those years. Accordingly, an amount of Rs.1,90,000/- was disallowed and balance amount was allowed to the assessee. Grounds No. 2 and 3 are partly allowed. 32. Grounds No. 4 and 5 pertains to the claim of 80RR on the incomes received as a professional actor in convertible foreign exchange. This issue is also recurring and consistent with the stand taken in the earlier years, we hold that assessee is eligible for deduction and accordingly, the grounds of the assessee are allowed. 33. In the result, appeal of the assessee ITA.No.1040/Hyd/2004 is partly allowed. 34. To sum-up, ITA.No.194/Hyd/2002 and ITA. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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