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TMI Blog2022 (5) TMI 540X X X X Extracts X X X X X X X X Extracts X X X X ..... s undertaken by the assessee. Thus, the assessing officer is entitled to determine the eligibility of exemption under section 11 on the basis of activities carried out by the assessee during the relevant financial year. The bone of contention on the eligibility between the assessee and the assessing officer are certain receipt received by the assessee during the relevant period under consideration viz; being the receipt income under the head income from other sources . .We find that the predominant object of promotion of Cricket and other sports are not doubted by the assessing officer. There is no allegation of the assessing officer that the receipt shown under the head income from other sources was not utilised on the promotion of sports. Or no activities for promotions of sports were undertaken by the assessee. Rather on careful examination of those disputed receipt we find that those receipt were generated from various by activities undertaken in furtherance of various sports. It is also matter of fact that prior to the impugned assessment year the assessee was granted exemption under section 11 of the Act. The assessing officer for the first time on the basis of certain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout appreciating the findings of the Assessing Officer? 5.Wheether, on the facts and in the circumstances of the case the ld. CIT(Appeals) is correct in allowing the claim of capital expenditure of Rs.2,19,98,390/- Rs.12,50,988 without appreciating the findings of the AO with regard to applicability of Section 2(15) of the Act? 6.The Revenue craves to add, alter, amend, modify, substitute, delete and/or rescind all or any Grounds of Appeal on or before the final hearing, in necessity so arises. 2. Brief facts of the case are that assessee is a society registered under Society Registration Act and having registration under section 12A(a) of Income tax Act granted vide certificate No. SRT/CIT/SIB/110-529-S/87 dated 11.09.1987. The assessee filed its return of income for the assessment year 2009-10 on 23.06.2009 declaring nil income. The return of assessee was processed and accepted under section 143(1) of the Act. Subsequently, case of assessee was re-opened under section 147 by the Assessing Officer by taking view that on analyzing of computation of income, he find that the assessee has received income of Rs. 1.57 Crore, which has been shown under the head in com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inserted to Section 2(15) with effect from 01.04.2009 provides that the provisions of first proviso shall not apply if the aggregate value of the receipts from the activities referred to therein is twenty-five lakh Rupees or less in the previous year. The assessee has shown gross income of Rs.2.30 crores which consists of bank interest, donations and income from other sources. The income from other sources is Rs.1.57 crores. The main source of income under the head income from other sources are annual maintenance fees from members of Rs.1.28 crores, ground rent (cricket) of Rs.5.97 crores, guest fees of Rs.1.27 lakhs, health club swimming pool income of Rs.1.28 lakhs, District Cricket Tournament income of Rs.3.29 lakh, Lawn Tennis income of Rs.1.42 lakh, Ranji Trophy match income of Rs.4.45 lakhs, Surat District Cricket Association open knockout cricket tournament income of Rs.8,978/-, summer coaching camp income of Rs.1.50 lakh etc. On the basis of aforesaid receipts, the Assessing Officer took his view that assessee is engaged in the business of nature of trade, commerce or business and aggregate value of receipts exceeded Rs.25 lakhs from such activities and accordingly the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not allowed. Similarly, the ground renovation of Rs.12.50 lakh was also not allowed and added to the total income of assessee by taking view that assessee is also treated as AOP. 6. Aggrieved by the treatment of AOP, the AOP and disallowance of exemption under section 11 of various receipt the assessee filed appeal before Ld.CIT(A). Before Ld. CIT(A) the assessee filed detailed written submission on 11.04.2018, 27.07.2018 and 10.02.2020. In its submission, assessee in sum substance stated that main object of the assessee is to encourage the sports and various approved games specially cricket at the State as well as National level. The assessee is duly registered under Societies Registration Act, 1860 having registration under section 12A(a) on 11.09.1987. The assessee claimed that Central Board of Direct Taxes (CBDT) has already been clarified that sports is a matter of General Public Utility. Accordingly, the assessee satisfies the condition of having a charitable object as mentioned in Section 2(15) of the Act. It does not violate any condition as stipulated in proviso to Section 2(15) of the Act. In earlier year, the activities of assessee have been recognized as charitab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst addition of Rs. 3.49 Crore made by assessing officer by holding that the assessee s case in covered by the proviso of section 2(15) of the Act and hence not eligible for exemption under section 11 of the Act. It was also held that Hon'ble jurisdictional High Court confirmed the finding of Ahmedabad Tribunal in three appeals, in Tax Appeal No.123/2014 dated 27.09.2019. Accordingly, directed the Assessing Officer were directed to delete the addition. Aggrieved by the order of Ld. CIT(A), Revenue has filed present appeal before the Tribunal. 8. We have heard the submissions of Ld. Commissioner of Income-tax- Departmental Representative (CIT-DR) for the Revenue and Ld. Authorized Representative (AR) for the assessee and have gone through the orders of authorities below. The ld. CIT-DR for the Revenue supported the order of Assessing Officer and submits that the activities carried out by assessee clearly on the nature of trade, commerce or business with the profit making and the gross receipt during the year exceed Rs.25 lakhs. The assessee has not shown any activities undertaking for the promotion of sports, as per their object rather are earning income by way of maintenan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and the assessing officer are certain receipt received by the assessee during the relevant period under consideration viz; being the receipt income under the head income from other sources consisting annual maintenance fees from members of Rs.1.28 crores, ground rent (cricket) of Rs.5.97 crores, guest fees of Rs.1.27 lakhs, health club swimming pool income of Rs.1.28 lakhs, District Cricket Tournament income of Rs.3.29 lakh, Lawn Tennis income of Rs.1.42 lakh, Ranji Trophy match income of Rs.4.45 lakhs, Surat District Cricket Association open knockout cricket tournament income of Rs.8,978/-, summer coaching camp income of Rs.1.50 lakh etc. Further the assessee received infrastructure subsidy from Gujarat Cricket association of Rs. 50.27 Lakhs. The assessing officer treated the said receipts received from commercial activities and considered as these were covered by the proviso to the section 2(15) of the Act. 11. The coordinate bench of Tribunal in Gujarat Cricket Association Vs JCIT (E) (2019) 101 taxmann.com 453 (Ahd Trib) held that where predominant object of various cricket associations was to promote cricket and profit earning was not predominant purpose, proviso to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other object of general public utility by virtue to proviso, would be excluded from the definition of ' charitable trust'. However, for the application of the proviso, what is necessary is that the entity should be involved in carrying on activities in the nature of trade, commerce or business, or any activity of rendering services in relation to any trade, commerce or business, for a cess or fee or any other consideration. In such a situation, the nature, use or application, or retention of income from such activities would not be relevant. Under the circumstances, the important elements of application of proviso are that the entity should be involved in carrying on the activities of any trade, commerce or business or any activities of rendering service in relation to any trade, commerce or business, for a cess or fee or any other consideration (emphasis added by us). 15. The Hon'ble Delhi High Court in Indian Trade promotion Organization (ITPO) Vs DGIT (371 ITR 333 Delhi) also held that the expression 'charitable purpose', as defined in section 2(15) cannot be construed literally and in absolute terms and it has to take colour and be considered in context ..... X X X X Extracts X X X X X X X X Extracts X X X X
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