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TMI Blog2019 (9) TMI 681X X X X Extracts X X X X X X X X Extracts X X X X ..... ereas in the books of accounts, the same is treated as expenditure and hence under the circumstances, in our view, the claim of the BCCI in this respect is not an exception. In view of this, the alternate plea of the BCCI is not opposite or destructive to its primary plea. However, the question that whether the expenditure can be considered as application of income for the purpose of claiming exemption as per the provisions of section 11 of the Act is left open to be decided in appropriate case. Question arises that when the donor that is BCCI in its books of account has not treated the payments to State Associations as voluntary grants or largesse, can the donnee/recipient claim the same to be so. The answer to this question, in our view, is no . , there seems force in the contentions raised by the Ld. DR that the Tamil Nadu Societies Registration Act, primarily, has been enacted for registration and regulating the societies in the State of Tamil Nadu. The BCCI though, having itself registered with the Tamil Nadu Societies Registration Act, yet, does not operate in Tamil Nadu rather all its operations and functions are conducted from Mumbai and its highly doubtful that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 11 of the Act as its activities no more fall under the definition of charitable purposes as per the provisions of section 2(15) of the Act. Taxation in the hands of the member of the AOP - amount paid by the BCCI to the appellant which has already been taxed at the hands of BCCI, cannot be now taxed in the hands of the member of the AOP i.e. the appellant State Association as it will amount to double taxation of the same amount. However, if the claim of the BCCI for treating the payments made to the State Association as deductible expenditure is accepted by any higher appellate authority in its case for the year under consideration, it will be open to the assessing officer of the appellant to reopen the case of the appellant and to decide whether the said payments received from BCCI can be taxed as income of the appellant which will be subject to our observations given on other issues raised in this appeal. The income received by the appellant/assessee otherwise, except the club income, which has not been taxed at the hands of the BCCI, will be assessed as per the normal provisions of the Act. Income from club facilities and from caterer is concerned, the plea of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he BCCI will have right and liberty to contest its cases irrespective of the observations given above as our findings rests on the pleadings of the parties before us though, the viewpoint of the BCCI has also been considered after giving due opportunity to the BCCI. Appeal of the assessee is treated as partly allowed for statistical purposes. - ITA No. 427/CHD/2017 - - - Dated:- 12-9-2019 - SHRI SANJAY GARG, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER For The Assessee : Sh. Ajay Vohra, Sr. Counsel And Shri Rajesh Marwah, CA For The Revenue : Sh. Manjit Singh, CIT DR ORDER Per Sanjay Garg, Judicial Member: The present appeal has been preferred by the assessee against the order dated 07.12.2016 of the Commissioner of Income Tax (Appeals)-2, Chandigarh [hereinafter referred to as CIT(A)]. 2. The assessee in this appeal has taken following grounds of appeal:- i) That the Ld. Commissioner of Income-tax (Appeals) has erred in facts and law in confirming the conclusion drawn by the Ld. AO that the rendering of services in respect of Indian Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nature of Income Amount Tournament Subsidy-others 4,75,000/- Reimbursement / subsidy-BCCI 1,86,64,990/- Share of TV Subsidy from BCCI 18,00,76,452/- IPL-Subvention from BCCI 8,10,43,200/- Service charges IPL (NET) 6,41,100/- Income from Member by way of contribution and use of Facilities 1,29,03,416/- Income from International Matches (Net) 2,66,10,382/- Interest from banks 4,27,58,0311/- Other Income 8,91,949/- Total 36,40,64,500/- 5. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erewith and to create healthy spirit of sportsmanship, to run a club house, banquet hall with catering facilities and to instill keenness for the game and to instill and spirit of the sportsmanship. That, therefore, the object of assessee would fall under the limb 'advancement of any other object of general public utility and thus included in the definition of charitable purposes as per the provisions of section 2(15) of the Act and thus the income of the assessee was exempt from taxation u/s 11 of the Act. 6. The assessing officer, considering the reply of the assessee, however, observed that the assessee was engaged in various activities from which the above stated income was generated. He observed that the income of the assessee was inclusive of an amount of ₹ 8,10,43,200/- from IPL-Subvention from BCCI and ₹ 6,41,100/- as service charges for IPL (NET). The Assessing officer observed that IPL event was a highly commercial event and assessee had generated income from the same by hosting matches of Punjab franchisee King, XI, Punjab during the Indian Premier League through TV rights subsidy, service charges from IPL and IPL subvention etc. Simi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igarh vide his order dated 21.06.2012 from A.Y. 2009-10 onwards on the ground that appellant is earning huge profit from business and training activities according it is not falling under the category of Charitable organization and with the amendment of section 2(15) by the Finance Act, 2008 the appellant has lost the right to be regarded as Charitable organization. Appellant filed copy of the order of the Hon'ble ITAT, Chandigarh dated 19.10.2015 (ITA No. 834/Chd./2012) through which the said order dated - 21.06.2012 of the CIT-II, Chandigarh has been quashed and the registration u/s 12A has been restored and submitted that the addition made on account of withdrawal of registration u/s 12A needs to be deleted. iii) It was submitted that object of the appellant society is to promote the game of cricket in the state of Punjab and the objects of the appellant are covered under the clause 'advancement of any other object of general public utility' of section 2(15) of the Act as clarified by CBDT vide circular No. 395 dated 24.09.1984. iv) Regarding activities of holding IPL, it was submitted that cricket matches including IPL are being o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant is running club on the principle of mutuality and only members are allowed to use the facility. Appellant also placed reliance on the decision of Hon'ble Bombay High Court in the case of Lai Lajpatrai Memorial Trust (supra). 8. The Ld. CIT(A), however, did not get satisfied with the above submissions of the assessee and dismissed the appeal of the assessee observing as under:- 5.3 I have carefully considered the submission of the appellant, assessment order and perused the material available on record. It is seen that the assessee society was registered u/s 12A of the Act on 27.03.1998. This registration granted u/s 12A was cancelled by Commissioner of Income Tax, Chandigarh vide his order dated 31.03.2009 on the ground that the activities of the assessee are hit by the proviso inserted to section 2(15) of the Act with effect from assessment year 2009-10. Hon'ble ITAT, Chandigarh Bench vide its order dated 27.08.2009 in ITA 538/Chandi/2009 set aside the order of the Commissioner of Income Tax cancelling the registration on the ground that Commissioner of Income Tax is not having power to cancel registration granted at any time under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or withdrawal of registration but in declining the benefits of exemption u/s 11 on that count, on year to year basis, notwithstanding the status of registration. (vi) The disentitlement for exemption u/s 11, as a result of the activities of a assessee being held to be not for charitable purposes under section 2(15) read with provisos thereto, is in respect of entire income of the assessee trust or institution but only for the assessment year in respect of which the first proviso to section 2(15) is triggered. 5.3.2 From the above proposition, it is clear that the activities of the assessee society whether being hit by first proviso to section 2(15) is to be seen on year to year basis to decide the exemption benefit u/s 11 of the Act. It cannot be disputed that Indian Premier League matches is a highly commercialized event in which huge revenue is generated through TV rights, gate collection money, merchandizing and other promotions. The franchisees have been sold to corporate and individuals and in this process appellant has received huge income of ₹ 8,10,43,200/- for IPLsubvention from BCCI, service charges (Net) of ₹ 6,41,100/- a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ociation as a Charitable Organization u/s 12 of the Income Tax Act, 1961 (in short 'the Act') has been restored. Inviting our attention to the Memorandum of Association / objects of the assessee association, the Ld. counsel has submitted that the assessee is basically a body for promotion of cricket and that the activities and objects of the assessee are concentrated for advancement of its objects of general public utility and, thus, squarely covered within the definition of Charitable Purposes as defined u/s 2(15) of the I.T. Act. 9.2 Mr. Vohra, the Ld. Counsel for the appellant/assessee, has further submitted that BCCI is the Apex body of different cricket associations and is registered under the The Tamil Nadu Societies Registration Act, 1975 at Madras having its head office at Mumbai. He has further submitted that the Indian Premier League (in short IPL ) is a baby of the BCCI and that the assessee is not involved in any manner in organizing or commercially exploiting the IPL matches. The commercial exploitation, if any, of the IPL matches is done by the BCCI. That the assessee i.e. Punjab Cricket Association (PCA) is a distinct and separate en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Staging ODI - ₹ 14,97,23,835/- 4. Non Staging - ₹ 13,81,32,312/- The total TV subsidy amount payable to Associations for the year 2007-08 is ₹ 371,89,46,858/-. 9.4 Mr. Vohra, has further contended that even if a Member State Associations does not provide any assistance in holding of the IPL matches or when the IPL match is not hosted or organized at the stadium of an association, still the member cricket association gets grant out of the TV subsidy. That in the year 2009, when the IPL matches were played entirely in South Africa, still all the member associations including the assessee received uniform subsidy of ₹ 8,10,43,200/- from the BCCI. However, if a match is staged or hosted at the ground of an association, the amount of subsidy is increased. That as per the sample agreement, the assessee has been paid ₹ 30 lacs + service tax in respect of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further submitted that whatever is the income of the assessee, including grants received from BCCI, that is applied for attainment of objects of the assessee society i.e. mainly for promotion of the game of cricket. That to achieve it objects, the assessee is running a Regional Coaching Centre, wherein, gaming equipment / material is also provided such as cricket balls, cricket nets etc. The assessee also distributes grants to the District Cricket Associations attached with it for the purpose of laying and maintenance of grounds, purchase of equipment etc. and as well as for holding of matches and for the purpose of promotion of game of cricket by the District Cricket Association. The assessee conducts various tournaments for the member District Cricket Associations. On the basis of the inter District tournaments, players are selected for Punjab team, who undergo various coaching camps and thereafter the teams are selected to participle in the national tournaments of different age groups. In addition, financial assistance has also been provided to the Ex-Punjab players in the shape of monthly grants. That the assessee is also maintaining International Cricket Stadium namely I.S. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e or act of the trust is to achieve its charitable objects, then merely because some incidental income is being generated, that will not disentitle the trust to claim exemption u/s 11 read with section 2(15) of the Act. That all the incidental income/surplus so earned by the assessee in the course of advancement of its objects of promotion of game of cricket has been ploughed back for charitable purposes. That, profit making is not the motive of the assessee and the only object of the assessee is to promote the game of cricket. That the Hon'ble P H High Court in the case of Moga Improvement Trust (supra) has held that if the trust is not set up with a motive of making profits but during carrying on of its activities according to the objects, if any surplus is generated which is again ploughed back for the activities of the trust exemption u/s 11 can not be denied. That the Assessing officer while framing the assessment has only to see that the assessee trust has carried out the activities in accordance with its objects and 85% of the total receipts have been spent towards the objects of the trust to which the assessee has complied with as per the relevant provisions of sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r historic interest, and the advancement of any other object of general public utility: Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity: Provided further that the first proviso shall not apply if the aggregate value of the receipts from the activities referred to therein is (ten lakh rupees) or less in the previous year. III) CIRCULAR NO. 11/2008, DATED 19/12/2008 The definition and rationale of Charitable purpose u/s 2(15) of the Income Tax Act has been elaborately explained vide the above circular. The circular basically re-iterates with requisite clarity the position of law that it shall apply only to the fourth limb of the section, i.e. the advancement of any other object of general public utility, if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the first time that any Indian sport has adopted a franchisee model and conducted a Players auction. It mentions at page 15 that BCCI went about looking for potential buyers to BUY a franchise in the league. Presentations were made to corporate houses, film stars and the likes to inform them about the Business of Sports and how this could well turn out to be a lucrative investment option with good ROI, given the passion for cricket in India post the presentations of, affair and transparent bidding process saw Shah Rukh Khan, Preity Zinta, RIL Pvt. Ltd., GMR Holdings, UB Group, Indian Cements Ltd., Deccan Chronicle and Emerging Media pick up the eight franchise of offer in the inaugural addition of the DLF Indian Premier League. The rights for the Mumbai franchise were won by RIL Pvt. Ltd. with a bid of US $ 111.9 million, which was also the highest. At page 16 of the report it is mentioned- Next on the BCCI s agenda was the Title Sponsor. DLF Ltd., India s leading real estate company, stepped bagged the Title Sponsorship rights. They won the rights through a fair and transparent open-bid process, with a bid of ₹ 40 crore per annum. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s presented to Lok Sabha on 2nd August, 2011. The subject matter of 38th Report was Tax assessment/Exemptions and related matters concerning IPL/BCCI. During the examination of the subject by the Standing Committee the following important issues were discussed (page 9 of the Report). i) Formation of IPL teams; ii) Funding pattern of the IPL and the franchisees; iii) Violations of Income tax Laws, Prevention of Money Laundering Act, Foreign Exchange Management Act (FEMA) and Companies Act by the IPL franchisees and their associates; iv) Tax exemptions granted of BCCI; v) Tax assessment of IPL; vi) Award of Media rights; vii) Decision making process in the BCCI/IPL etc. The Report at page 31 mentions that auction for IPL-1 which took place on 24.01.2008 went on to fetch $ 723.59 million against the base price of $ 400 million. It further, highlights the huge amount of investments made by various entities that made successful biddings for the IPL (page 31-32 of the Report). The Report clearly mentions (page 34) that the incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding upon the City in which the matches were held and the importance of matches. In some matches, luxurious facilities of food and beverages were also provided to the spectators. The franchisee teams have submitted that no donations/ on-money etc. were collected for tickets with such luxurious facilities of foods and beverages. The high denomination ticket prices are stated to include provision for food and beverages. The IPL franchisees are stated to have included these ticket receipts in their total income. Some of the companies who were allotted a large bulk of tickets are the various State Circket associations, Nike, Idea, Cellular, Coca Cola, United Spirits Limited, Kingfisher, Jaiprakash Associates, Apollo Hospitals etc. The Standing Committee of Lok Sabha took cognizance of various irregularities in award of media rights and commercial contracts executed in the course of the IPL (page 80 81). It was observed that the IPL Governing Council allowed itself to be relegated to the position of a mere rubber stamp of the then Chairman, IPL. The then treasurer Sh. N. Srinivasan admitted before the committee the various irregularities and pleaded sorry while sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dies to enter its ninth season. True to its name, it has become a premier league. The fact that the IPL is the single largest revenue generator for the BCCI cannot be lost sight of. Without the IPL, much of the media attention and international interest would be lost . The Committee at Chapter 2 (page 121) of its Report highlighted the Governance issue wherein at last para of the page 121 its states There seems to be no collective interest in the game being promoted, and cricket stands without a custodian for its protection and propagation in its most passionately followed nation. At page 124 para (f) it is stated that no representation to women has been accorded by the BCCI. At page 132 it termed it as an unfortunate fact that Indian women cricket team had last played a test match 8 years ago. The committee also lamented at page 133 that there has been no suggestion in the BCCI for any promotion or association with cricket for the differently-abled. The Supreme Court Committee at chapter 9 of its report has highlighted the unhealthy practices of match fixing and betting. The above report clearly highlights the undisputable fact that there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chancellor or the news items we come across, may not be enough to drive to the conclusion about the genuineness or otherwise of the activities of the assessee, however, at this stage, these factors coupled with other facts as discussed can not be totally ignored. BOMBAY HIGH COURT JUDGEMENT DATED 30/01/2018 The Bombay High Court in the concluding para of its Judgment dated 30/01/2018 in the case of Lalit Kumar Modi vs Special Director in WP No. 2803 of 2015 held as under:- 47. Before parting, we must indicate that it is because of the acts and deeds of the BCCI in relation to a tournament styled as IPL that all these proceedings had to be initiated and now conducted in accordance with the FEMA. If IPL has led to serious breaches and violations of the FEMA, then, it is high time the organizers realize that after 10 years of holding such tournaments what we have achieved can be termed as a gain or advantage or benefit for they are outweighed completely by the resultant illegalities and breaches of law, which are projected in several courts consuming a lot of precious judicial time. If the IPL has resulted in all of us being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the issue of conflict of interest between the BCCI President and the owner of Franchisee team. Therefore, it can be safely concluded that IPL matches are outrightly commercial activity and significantly without any claim or pretension of undertaking any charitable activity. V) INVOLVEMENT OF PUNJAB CRICKET ASSOCIATION IN BCCI-IPL MATCHES The involvement of the Punjab Cricket Association in carrying on of activity in the nature of trade, commerce or business needs to be examined from the mandate of the amended proviso to section 2(15) which states: Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity, unless---- A. The involvement of Punjab Cricket Association in hosting the IPL matches is absolute primarily by virtue of it bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The salient features of the agreement delineated below reveal the extent and depth of the involvement of PCA in organizing the BCCI mandated IPL matches:- 1. Parties to Tripartite Stadium Agreement. i) The Tripartite Agreement itself is primary evidence of PCA s involvement in the BCCI-IPL matches. The Stadium agreement is executed between PCA mentioned as the State Association. It is an unambiguous assertion that PCA is the State Association of BCCI i.e. the Federal constituent of the Central body (BCCI). ii) The IPL is a separate sub-committee unit of BCCI, its Central Body. iii) The BCCI-IPL is an owner of League whereas the PCA being the federal constituent of BCCI is the owner and operator of the stadium. It means that the federal constituent of the Apex Body is the owner of the stadium and is organizing the IPL matches in the stadium on the direction of BCCI. 2 . Grant of Right (Articles 2.1 to 2.4). (i) The agreement states the BCCI IPL(the central unit) wishes to be granted a right from the state association for the use of the stadium. It is i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uired in connection with exploitation of media right at its own cost. 5. License Related (3.14 to 3.18) . (i) Article 3.14 makes it mandatory for the PCA to make the stadium available free from any commercial obligation or advertising etc., which it may enter into with any entity. This demonstrates that the PCA s involvement in organizing /arranging the IPL matches is at the cost of staging of its own matches or other events at the stadium. (ii) Article 3.18 mandates the PCA to take all reasonable steps to prevent the exercise of any right by any third party. It further mandates that the PCA shall use its best endeavor to make areas surrounding the stadium available for exploitation of the commercial rights. 6. Intellectual Property Rights (Article 3.19) . (i) As per article 3.19 of the agreement the PCA as the State Association agrees to cooperate fully with BCCI-IPL and assist BCCI-IPL to take such action as are reasonably requested by BCCI-IPL to prevent infringement of commercial rights etc., in relation to any of the same. In the same article the PCA agrees to assist B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity, Conclusion- The Ld. Counsel had made a self-serving statement before the Hon ble Bench that the assessee Punjab Cricket Association is not involved (as mandated by proviso to section 2(15)) in the BCCI-IPL matches. However, the analysis of various articles of the Tripartite Agreement reveals the extent and depth of the involvement of PCA in the BCCI-IPL matches. The various articles highlighted above amply demonstrate that the PCA being the federal constituent and Full Member of BCCI had taken various steps/initiative at its own cost to ensure that the BCCImandated IPL matches are organized smoothly and are huge commercial success. The Tripartite Agreement and Schedules 1 2 annexed to it are clinching documentary evidences of the fullfledged involvement of PCA in BCCI-IPL matches. Moreover, the arrangement of receiving ₹ 30 lacs in lieu of certain facilities by the PCA including providing Stadium alongwith other facilities brings it directly in the ambit of proviso to Section 2(15) of Income Tax Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... involved in the case in which it is rendered and, while applying the decision to a later case, the courts must carefully try to ascertain the true principle laid down by the decision of this court and not to pick out words or sentences from the judgment, divorced from the context of the questions under consideration by this court, to support their reasonings. Reliance is further placed on Padmasundara Rao (Decd.) and Others Vs State of Tamil Nadu and Others 255 ITR 147. Courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. There is always peril in treating the words of a speech or judgment as though they are words in a legislative enactment, and it is to be remembered that judicial utterances are made in the setting of the facts of a particular case, said Lord Morrin in Herrington v. British Railways Board [1972] 2 WLR 537 (HL). Circumstantial flexibility, one additional or different fact may make a world of difference between conclusions in two cases. b) In view of the fact that the involvement of the Punjab Cricket Associat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Chandigarh unambiguously and indisputably demonstrate that the BCCI-IPL matches are purely business/commercial venture with profit earning as its sole objective. The agreements between BCCIIPL and Franchisee and Punjab Cricket Association further reveal/demonstrate the extent and depth of the involvement of the assessee in the Business/Commercial venture of BCCI-IPL. The case of the assessee requires adjudication on the basis of its peculiar facts as presented by the Department alongwith the relevant and legally admissible documents. Conclusion- The primary and dominant purpose of the BCCI-IPL matches is to merge Sport and Business as clearly mentioned in the 79th Annual Report of BCCI. The various reports including 38th Report of Standing Committee; Lodha Committee s Report; Justice Mudgal Report IPL Probe Committee Report have clearly brought out the predominant commercial character of BCCI-IPL matches. In fact the assessee has not even claimed that BCCI-IPL matches are charitable activities. Moreover, in view of absolute involvement of the assessee in the BCCI-IPL venture as evidenced by Tripartite Agreements no benefit of the ratio enunciated in the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of Punjab Cricket Association, Mohali vs ACIT, C-6(l) for Assessment Year 2010-11 Ref: ITA No. 427/Chandi/2017 AY 2010-11 of the appeal by the Punjab Cricket Association, Mohali vs ACIT, C-6(l), Mohali pending adjudication before the Chandigarh bench Dear Sir, We refer to the hearing held on 11th September, 2018, in front of Hon'ble Chandigarh ITAT Bench, wherein we have been asked to provide the documents as per attached statement for the period AY 2008-09 to AY 2015-16. During the course of hearing we have been given to understand that the major issue in the appeal by the Punjab Cricket Association (PCA) is pending before your honours is in regard to the taxability of payments made by the BCCI to State associations. The stand of the BCCI will be clear from the submissions made before the assessing officer during the course of BCCI tax assessments as well as the submissions made along with copies of BCCI audited accounts and assessment order for the period AY 2010-11 before the Hon'ble Chandigarh ITAT Bench during the course of hearing held on 11 September, 2018. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the purpose of ascertaining the stand and treatment given by the BCCI to the different amounts or to say the alleged grants to State Associations. A perusal of the accounts of the BCCI reveals that the BCCI has booked the aforesaid payments to the State Associations as expenditure out of the gross receipts. The BCCI has taken a clear and strong stand before the tax authorities including appellate authorities that the payment to the State Associations is not at all appropriation of profits. In fact, it is the plea of the BCCI that its registration u/s 12 of the Act has been wrongly cancelled and that the appeal against the order dated 30.03 2012 of the Mumbai Bench of the Tribunal confirming the cancellation of registration is pending before the hon ble Bombay High Court. The BCCI still continue to claim that the payments made to the Member State Associations is application of the income as per provisions of section 11 of the Act. This stand of the BCCI is in anticipation of the decision of the hon ble Bombay High court in its favour. The BCCI in the alternative has claimed that the payment made to the Member State Associations earned from IPL are clearly in the nature of expendi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ternational matches to various member cricket association which organise the matches in their stadia. The franchisees conduct matches in the Stadia belonging to the State Cricket Association. The State Association is entitled to all instadia sponsorship advertisement and beverage revenue and it incurs expenses for the conduct of the matches. BCCI earns revenue by way of sponsorship and media rights as well as franchisee revenue for IPL and it distributes 70% of the revenue to the member cricket association. .. . BCCI has created a very strong infrastructure in India for the cricketers as well as spectators through the state cricket associations. It has provided funds to the state associations to run coaching camps, academies, tournaments, and various leagues and to build infrastructure in the world. The stadiums are modern and the largest in the world. There are vibrant interstate tournaments, inter-zone tournaments, city leagues, inter-university matches and so on. Whenever a foreign team visits India, the international matches such as Test and ODI are allotted by BCCI to the state cricket associations by a rotation policy. The matche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st) to the state associations. This amount has been utilized by the respective associations to build infrastructure and promote cricket, making the game more popular, nurturing and encouraging cricket talent, and leading to higher revenues from media rights. Even in the event that exemption under section 11 is denied, the payments to state associations must be allowed as a deduction, as expenditure laid out or expended wholly and exclusively for the purpose of earning such income. It must be appreciated that in order to earn revenues, BCCI was and continues to be highly dependent on the state associations. BCCI does not have the infrastructure and the resources to conduct the matches by itself and is dependent on the state associations to conduct the matches. The income from media rights is dependent on the efforts of the state associations in conducting the matches from which the media rights accrue. The division of revenues and expenditure is a matter of arrangement between the parties. Certain incomes such as sale of ticket revenues belong to the state associations, who meet the expenditure on the matches such as security for players and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acilities of the state association proportion of income must be shared with the state association. Therefore all the payment as TV subvention and subsidy are to carry out the cricketing activities and allowable as expenditure. To reiterate we wish to submit that when the learned AC concluded that the activities of the appellant is business activities, then expenditure incurred in carrying out of such activities should be allowed as business expenditure. Without such expenditure business of the appellant will never prosper. When department accepted that assessee is carrying out business then it how much expenditure made for carrying out the business should be left on the appellant., . What is to be seen is whether purposes of increasing revenue and promoting the game of cricket are achieved by making these payments. We have by citing examples of the most recent match clearly pointed out that if it were not for the support of the appellant and the spending of monies, the purpose of business , namely expansion and augmenting of revenues never have been achieved. If the state associations did not upgrade their facilities international tou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s International Cricket Conference in 1965 and took up its current name in 1989. The independent ICC was funded initially by commercial exploitation of rights to world cup of One Day International Cricket. As not all member countries had double tax agreement with United Kingdom, to protect cricket s revenue a company namely ICC Development (International) Pvt. Ltd. was created. This was established in January 1994 in Monaco. The ICC had earlier requested the British Govt. to be given special exemption from paying UK Corp. Tax on its commercial income. As the British Govt. was unwilling, the ICC eventually settled in Dubai. The ICC is registered in British Virgin Island. The ICC has 12 full Members, which includes India and 93 Associate Members (Source-Wikipedia, Copy Enclosed, Page No. ). The ICC in its Memorandum of Association at sub article (D) of Article 2.4 states that each member must: (D) manage its affairs autonomously and ensure that there is no Government (or other public or quais-public body) interference in its governance, regulation and/or administration of Cricket in its Cricket Playing Country (including in operational matters, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chairmanship of Hon ble Mr. Justice R.N. Lodha, former CJI. Subsequent to this judgment the Justice Lodha Committee gave its report highlighting that IPL is the single largest revenue generator for the BCCI. The report has been duly submitted in the earlier paper book. Further, the report of the Probe Committee under the Chairmanship of Mr. Justice Mukul Mudgil has also been submitted, which highlights the allegations and investigations conducted for betting and spot fixing in the IPL matches. The various documents mentioned above clearly bring out the gross commercial character of the BCCI-IPL venture sans any trace of charitable activity. In the backdrop of the undisputed commercial character of the IPL venture the role of Punjab Cricket Association is clear- it is absolutely involved the commercial venture of IPL. It is pertinent to mention here that as BCCI does not own any cricket stadium, the involvement of various State Associations including PCA is sine qua non for the success of the IPL format. In this regard the tripartite agreement/stadium agreement submitted as additional evidence by the assessee before the Hon ble ITAT Chandigarh is itself an evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hisee) (Clause 7) reveals that the franchisee shall be initially paying to BCCI-IPL franchise consideration for a period of nearly nine years i.e. from 2008 to 2017. In this period the franchisee shall be paying a fixed league deposit amounting to ₹ 9.12 cr. on or before 2nd January of each such year. It further provided that an amount equivalent to ₹ 21.28 cr. shall be paid by the franchisee on the date of 1st match in the league in each year. In fact after the period of nine years i.e. from the year 2018 onwards the franchisee shall be paying an amount equal to 20% of its income received in respect of such year. It is pertinent to highlight that the franchisee is making payments to a body i.e. BCCI which does not owns any stadium. As per clause 2 of the agreement (supra), the BCCI grants the franchisee a right to be the only team in the league whose home stadium is located in the territory during a period of not less than the first three sessions. As per its sub clause-c, the BCCI shall be providing the franchisee a stadium to stage its home league matches at cost. This is to be done by way of an agreement between BCCI-IPL and the owner of the stadiu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of Gujarat Cricket Association vs. JCIT (Exemptions), Ahmadabad -101 Taxmann.com-453 dated 24.01.2019, the BCCI s stand during its assessment proceedings has been quoted. The BCCI vide its submission dated 03.12.2012 to it s A.O. has explained its relationship with the State Cricket Associations as follows: 1. BCCI is society registered under the Tamil Nadu Societies Registration Act. It was formed in the year 1929 with the object of promotion and development of cricket in India and is a member of the International Cricket Council (ICC) the regulatory body for world cricket. As a member of ICC, BCCI represents India in bilateral tours between member countries and in ICC tournaments such as the World Cup. 2. BCCI has 30 members out of whom 25 are state cricket associations, 2 are private clubs and 3 are Central Government Institutions. BCCI does not own or manage the infrastructure and facilities that are required for cricket. It encourages and oversees the various state associations to promote the game, build the required infrastructure organize tournaments, leagues, coaching camps etc. in their respective states. Whenever a foreign team ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to earn the income from media rights. The stand of BCCI mentioned above confirms the fact that the payments received by the PCA from the BCCI cannot be termed as grant at all. As the BCCI itself has mentioned that It is in expectation of this revenue that the various state associations take an active part and cooperate in the conduct of the matches . It is further pertinent to mention that in absence of any cricket stadium the BCCI remains dependent on State Associations. Therefore, the various payments made by the BCCI ensures that the State Associations are ever ready with their stadium and other infrastructure to ensure smooth execution of IPL matches. B. It is pertinent to point out that in the aftermath of Justice Lodha Committee s report many structural changes were ordered by the Hon ble Supreme Court. Unhappy with such changes the ousted high profile BCCI and State Associations officials attempted preventing matches from being held in the stadiums. As the cricket stadiums are owned by the State Associations, by not allowing matches to be played these State Associations made their intentions clear of with holding the usage of cricket st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vity of the assessee which is in the nature of trade, commerce or business. However, the case of the revenue authorities hinges on the allegation that the way and manner in which cricket matches are being organized, particularly the IPL matches, the activity of organizing cricket matches is nothing but brute commerce. Undoubtedly, it would appear that right from the time Kerry Packer started his World Series Cricket in 1977, there has been no looking back in commercialization of cricket and the impact of this commercialization has not left Indian cricket intact. The Indian Premier League and the rules of the game being governed by the dictates of commercial considerations may seem to be one such example of commercialization of Indian cricket. The difficulty for the case of the revenue before us, however, is that these matches are not being organized by the local cricket associations. We are told that the matches are being organized by the Board of Cricket Control of India, but then, if we are to accept this claim and invoke the proviso to Section 2(15) for this reason, it will amount to a situation in which proviso to Section 2(15) is being invoked on account of activities of an en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BCCI, and the assessee cannot thus be faulted for the commercial considerations said to be inherent in planning the matches. As we make these observations, and as we do not have the benefit of hearing the perspective of the BCCI, we make it clear that these observations will have no bearing on any adjudication in the hands of the BCCI. Suffice to say that so far as the cricket associations are concerned, the allegations of the revenue authorities have no bearing on the denial of the status of 'charitable activities' in the hands of the cricket associations before us- particularly as learned Commissioner has not been able to point out a single object of the assessee cricket associations which is in the nature of trade, commerce or business, and, as it is not even in dispute that the objects being pursued by the assessee cricket associations are objects of general public utility under section 2(15). All the objects of the assessee cricket associations, as reproduced earlier in this order, unambiguously seek to promote the cricket, and this object, as has been all along accepted by the CBDT itself, an object of general public utility. (emphasis supplied). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sec. 2(15). For falling under the said section an assessee need not organize itself any such activity as mentioned in the Section. Rather its mere involvement i.e. it being enveloped by, entangled to, even included in or even contained by it or merely by implication would bring it under the ambit of Sec. 2(15). The substitution of word involves with the word organize clearly defeats the legislature s letter and intent, which is not permissible in law. The undisputed guiding principle is that the language of the statute should be read as it is and the Courts should avoid addition or substitution of words. In view of the above the order of the Hon ble ITAT Ahmadabad may not be the correct judicial precedence to be followed. 5. Chandigarh Lawn Tennis Association vs. ITO (Exemptions), Chandigarh- 95 Taxmann.com-308 The Hon ble ITAT Ahmadabad has relied on and referred to various judgments including the latest judgment from the Hon ble Pb. Haryana High Court in the case of Tribune Trust vs. CIT -390 ITR 547. However, the Hon ble ITAT Chandigarh in the case of Chandigarh Lawn Tennis Association vs. ITO (Exemptions), Chandigarh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m of the affairs of the BCCI. The status of the BCCI under the circumstances is nothing but of an Association of Persons (in short AOP ) of which State Associations including the assessee are the members. Though, the BCCI has got itself registered separately as a Society under the Tamil Nadu Societies Registration Act but with the mere registration of the BCCI as a society, in our view, does not change its nature of being an AOP of the State Associations. The matter does not end here. There is a complete federal structure starting from lower level i.e. District Cricket Associations to the International Cricket Council. District Cricket Associations collectively form State Cricket Associations. State Cricket Associations collectively form the National Body named as BCCI. The similarly existing National Cricket Boards/associations of different countries including BCCI collectively constitute International Cricket Council (in short ICC ). There is no rebuttal to the submissions of the Ld. DR that ICC commercially exploit the International Cricket matches. However, to be sure enough about the activities of the ICC, we have gone through the website of the ICC Icc-cricket.com . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in arriving at the profit/(loss) before tax. It is pertinent to mention here that Sh. Shashank Manohar, representative of the BCCI is the present Chairman of the ICC. 19. IPL organized by BCCI is the domestic form of international cricket T-20, however, it is not limited to domestic players but players from other countries are also purchased by private investors/franchise through auction involving huge money. There is no denial by the appellant that IPL is a commercial venture of BCCI which is a mixture of sports, entertainment and business. That high stakes are involved and huge investments of the private business houses have been attracted with sole motive of maximum exploitation of the popularity of the cricket for generating and augmentation of the Revenue which is shared as per the arrangements of the BCCI with its constituent members and as well as third parties / franchise holders of the teams. 20. Though, apparently, there appears no doubt that IPL is a commercial venture of the BCCI, however BCCI before the tax authorities has claimed itself to be a charitable institution. We have been told that the appeal of the BCCI against its cancellati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rally claim the salary to teachers as application of income whereas in the books of accounts, the same is treated as expenditure and hence under the circumstances, in our view, the claim of the BCCI in this respect is not an exception. In view of this, the alternate plea of the BCCI is not opposite or destructive to its primary plea. However, the question that whether the expenditure can be considered as application of income for the purpose of claiming exemption as per the provisions of section 11 of the Act is left open to be decided in appropriate case. 21. Now the question arises that when the donor that is BCCI in its books of account has not treated the payments to State Associations as voluntary grants or largesse, can the donnee/recipient claim the same to be so. The answer to this question, in our view, is no . The BCCI in its consistent plea before the tax authorities has claimed that the payments made to the State Associations is under an arrangement of sharing of revenues with the State Associations. That the State Associations are entitled by virtue of established practice to 70% of the media right fee. That if each state association we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purpose of section 11 of the Act. Hence, as per legal status of BCCI as on today, the BCCI is being treated by the tax authorities as an AOP only and the payments made to the State Associations as distribution of profits. Under the circumstances, these payments by the BCCI to the State Associations including the appellant, having already been taxed at the hands of BCCI can not be now taxed in the hands of the member of the AOP i.e. the appellant State Association as it will amount to double taxation of the same amount. 23. However, interestingly, the assessee PCA has denied that BCCI is its AOP, rather the plea of the assessee is that it is a charitable institution and that the amount received by it from BCCI is grant, hence would fall in the definition of its income u/s 2(24)(iia) of the Act and further exempt u/s 11 of the Act. To examine this plea of the appellant, firstly, we will have to examine whether the activities of the assessee fall within the scope of the term charitable purposes as defined u/s 2(15) of the Act for claiming exemption u/s 11 of the Act. The BCCI, though registered separately as a society under the The Tamil Nadu Societies Registrat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... activities of the BCCI are done as per the aims and objects under which it has been registered and that there is no violation of rules and regulations of the state Societies Registration Act, as all the activity being done by the BCCI is from the head office which is situated outside the State of Tamil Nadu. The Ld. DR has submitted that though there is no bar for a society to extend its activities out of a state where it has been registered, however, in the case of the BCCI, the entire operations of the BCCI are from a place out of the jurisdiction of the State Authorities with whom it has been registered as a Society. The Ld. DR in this respect has submitted that the facts, itself, speak that the BCCI has shielded itself under the veil of registration under the Tamil Nadu Societies Registration Act just to plead that it is a separate entity from the State Associations, whereas, in fact, it is nothing more than an AOP of the State Associations and being so, if the BCCI is involved in commercial venture, the State Associations cannot claim that they have nothing to do with the activity of the BCCI. It has been submitted that what is done by the BCCI is the act of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mes of chance providing prizes for winners are played and no society which does not consist of at least seven persons shall be registered under this Act. MANAGEMENT AND ADMINISTRATION. 13. Every registered society shall- (1) have a registered office to which all communications and notices may be addressed and shall file with the Registrar notice of situation of such office and of any change thereof within such period as may be prescribed after the date of the registration of the society or after the date of change, as, the case may be ; (2) keep displayed on the outside of its registered office its name in a conspicuous position, in legible characters and, if the characters employed therefor are not those of Tamil, also in the characters of Tamil. (emphasis supplied by us) 28. The Ld. DR has further placed reliance on the following rules and Regulations of the BCCI. 2. HEADQUARTERS: The Headquarters of the Board shall be located at Mumbai. 14. ADMINISTRATION : i) Mumbai shall be the adm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cement of other objects of public utility, as per the provisions of law, is barred from involving in any commerce or business, it cannot do so indirectly also by forming a partnership firm or an AOP or a society with some other persons and indulge in commercial activity. Any contrary construction of such provisions of law in this respect would defeat the very purpose of its enactment. The assessee in this case is a member of the BCCI and the status of the BCCI as on date is that of an AOP and it has been held to be actively involved in a large scale commercial venture by way of organizing IPL matches, hence under the circumstances, the appellant as per the position as on date, can be said to have been involved in commercial venture as a Member of the BCCI irrespective of the fact that it receives any payment from the BCCI or not or whether such receipts are applied for objects of the appellant society or not. However, once the income is taxed at the hands of the AOP, the receipt of share out of the income of the AOP cannot be taxed in the hands of the member of the AOP. Which means that though, for the sake of ease of taxation, the AOP has been recognized as a separate entity, howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the revenue has started to construct a second international stadium in the same city. The facts itself speak that this huge investment is made by the appellant not with the predominant object of promotion of the sport of cricket rather the main object is the augmentation of the revenue. The BCCI in clear terms has pleaded that without the involvement of State Associations, the conduct of the IPL matches and huge revenue generation from the same is not possible. The appellant being party to the Tripartite Agreement is itself an evidence of the appellant being commercially involved in BCCI-IPL matches. 34. The Ld. DR at this stage has submitted that apart from assessee involving in commercial venture, the objects of the assessee, otherwise are not entirely for the promotion of the game of cricket. One of the main objects of the appellant, as that of the BCCI also, is to control the cricket under its area and this conduct of the assessee is not in the interest or promotion of cricket rather to establish its monopoly and dominance in the field. The Ld. DR in this respect has invited our attention to the objects of the assessee society which inter alia include the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich eventually thwarted attempts of creating a level playing field by a potential competitor. The Ld. DR has further invited our attention to the Assessment order passed in the case of the BCCI wherein the Assessing officer has reproduced some of the rules and regulations of the BCCI , which read as under: (a) No Club affiliated to a member or any other organization shall conduct or organize any tournament or any match/matches in which players/ teams from the region within the jurisdiction of a member are participating or are likely to participate without the previous permission of the member affiliated to the Board.... (b) Permission for conducting or organizing any tournament or match / matches will be accorded only to the members of the Board and will be in accordance with the rules framed by the Board in this regard from time to time BAN ON PARTICIPATION IN UNAPPROVED TOURNAMENTS: (c) No member; Associate Member or Affiliate Member shall participate, or extend help of any kind an unapproved tournament. (d) No player (Junior senior) registered with the BCCI or its members, Associate Memb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or any of its affiliated members without the written permission of the Board either in India or abroad. 35. We have also come across the order dated November 29, 2017 of the Competition Commission of India (in short CCI ) passed in the case of Sh. Surinder Singh Barmi vs BCCI , whereby the Commission has re-imposed a penalty of ₹ 522.4 million on the Board of Control for Cricket in India (BCCI) and reiterated the findings of its February 2, 2013 order, which had previously been set aside by way of a February 23, 2015 Competition Appellate Tribunal (COMPAT) order. The CCI held that the BCCI had abused its dominant position in the market by restricting competition while conducting IPL tournaments; and granting exclusive media rights for the broadcasting of IPL matches to one TV channel for a 10-year period. The CCI also differentiated international and other domestic cricket from professional leagues, such as the IPL. The CCI noted that in international and domestic cricket, the players represent the nation or concerned state. However, in professional leagues, foreign players are also involved and the main aim of each party is to profit. Further, the CCI fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o adopted restrictive trade practice by not allowing the other associations who may pose competition to the BCCI to hold and conduct cricket matches for the sole purpose of controlling and exclusively earning the huge revenue by way of exploiting the popularity of the cricket. The assessee cricket association being the constituent member of the BCCI has also adopted the same method and rules of the BCCI for maintaining its monopoly and complete domain over the cricket in the area under its control . As observed above, such an act of exclusion of others cannot be said to be purely towards the promotion of game rather the same can be said to be an act towards the depression and regression of the game. Hence the claim of the assessee that its activity is entirely and purely for the promotion of game cannot be accepted. In view of the above discussion, the contention of the Ld. Counsel that the payment by the BCCI to the appellant is a grant to Charitable Institution cannot be accepted. Even as discussed above, the nature of payment by the BCCI, is not voluntary grant or largesse rather the same is a payment in an arrangement of sharing of Revenue from commercial exploitation of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15. We must then proceed to consider what is the meaning of the requirement that where the purpose of a trust or institution is advancement of an object of general public utility, such purpose must not involve the carrying on of any activity for profit. The question that is necessary to be asked for this purpose is as to when can the purpose of a trust or institution be said to involve the carrying on of any activity for profit The word involve according to the Shorter Oxford Dictionary means to enwrap in anything, to enfold or envelop; to contain or imply . The activity for profit must, therefore, be intertwined or wrapped up with or implied in the purpose of the trust or institution or in other words it must be an integral part of such purpose ... Take, for example, a case where a trust or institution is established for promotion of sports without setting out any specific mode by which this purpose is intended to be achieved. Now obviously promotion of sports can be achieved by organising cricket matches on free admission or no-profit no-loss basis and equally it can be achieved by organising cricket matches with the predominant objec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he monthly journal is made on the same basis on which it would be made by a commercial organisation leaving a large margin of profit, it might be difficult to resist the inference that the activity of publication of the journal is carried on for profit and the purpose is non-charitable. We may take by way of illustration another example given by Krishna Iyer, J. in Indian Chamber of Commerce case (supra) where a blood bank collects blood on payment and supplies blood for a higher price on commercial basis. Undoubtedly, in such a case, the blood bank would be serving an object of general public utility but since it advances the charitable object by sale of blood as an activity carried on with the object of making profit, it would be difficult to call its purpose charitable. Ordinarily, there should be no difficulty in determining whether the predominant object of an activity is advancement of a charitable purpose or profit-making. But cases are bound to arise in practice which may be on the border line and in such cases the solution of the problem whether the purpose is charitable or not may involve much refinement and present real difficulty. (emphasis supplied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory behind Section 2(15). It is to be noted that the effect of introduction of 2nd proviso to section 2(15)of the Act has not been discussed in any of the decisions relied upon by the Ld. Counsel for the assessee. The coordinate Bench after thorough discussion of the matter, {in the case of Chandigarh Lawn Tennis Association vs. ITO (Exemptions), (supra)} has held the trusts or the institutions carrying on the activity included in the first part of definition of 'charitable purposes' as defined under section 2(15) viz. for the objects of relief to the poor, education yoga, medical relief, preservation of environment and preservation of monuments or places or objects of artistic or historic interest and are also carrying on the business activity which is incidental to the attainment of objective of such trust or institution {as provided under section 11(4A)}, are entitled to claim exemption of their income including the income from incidental business activity under section 11 subject to the compliance and applicability of the other relevant provisions of the Act, irrespective of the quantum of income earned from such incidental business activity. That, however, the trusts o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing upon its another decision in the case of DIT (Exemption) v. Khar Gymkhana[2016] 385 ITR 162/240 Taxman 407/70 taxmann.com 181 (Bom.) has duly taken note of the provisions of section 13(8) of the Act inserted vide Finance Act 2012 w.r.e.f. 1.4.2009 as well as the CBDT Circular No.21 of 2016 and though, held that merely because in one year income of assessee-trust exceeded prescribed limit provided under second proviso to section 2(15), that by itself, could not warrant cancellation of registration of trust, however, where the receipts are hit by the proviso to Section 2(15) of the Act, the benefit of exemption to its income for the previous year relevant to the subject assessment year will not be available. However, it has been further held that if this happens on continuous / regular basis, it could justify further probe / inquiry before concluding that the trust is not genuine. This is also so held in the own case of the assessee by the coordinate Bench of this Tribunal vide order dated 19.10 2015 in an appeal filed by the assessee against the cancellation of its registration u/s 12AA (3) of the Act bearing ITA No.834/Chd/2012. Admittedly the receipt from commercial exploitat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ights to hold matches and thereby earning huge income, hence the said activity can not be said to be incidental activity rather the commercial exploitation of the match is one of the main activity of the assessee, hence, the case of the assessee ,in our view, for the year under consideration will not fall within the definition and scope of section 2(15) of the Act and thus the assessee is not entitled to exemption u/s 11 of the Act. While holding so, we do not mean that the assessee s activity is not at all for promotion of the game of cricket. No doubt, the assessee is also activity contributing towards the promotion and popularity of the cricket but at the same time its activities are also concentrated for generation and augmentation of the revenue by exploiting the popularity of the game and towards monopolisation and having dominant control over the cricket to the exclusion of others. What we want to convey is that the commercial exploitation of the popularity of the game and the property/infrastructure held by the assessee is not incidental to the main object but is apparently and inter alia one of the primary motives of the assessee. At this stage, we deem it fit to refer to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the appellant/assessee otherwise, except the club income, which has not been taxed at the hands of the BCCI, will be assessed as per the normal provisions of the Act. 43. However, so far as the income from club facilities and from caterer is concerned, the plea of the assessee is that all the above facilities e.g. Gym, Lawn Tennis, Swimming pool etc. are interconnected and interwoven with the objects of the appellant i.e. promotion of sport and cannot be viewed separately. Without prejudice to above, it has been submitted that the appellant is maintaining separate books of accounts in respect of all above club activities. That these facilities are being provided on the principle of mutuality, accordingly, these cannot be termed as trade, commerce or business activity. That the receipts from the caterer for providing catering service during the matches is intrinsically linked with the activity of organizing matches and tournaments for the promotion of cricket. It has been submitted that the club facilities are being run for the benefits of members and cricketers as per the objects of the society on the principle of mutuality. However, the Assessin ..... 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