M/S. GUJARAT CRICKET ASSOCIATION,,AHMEDABAD vs. THE DY. CIT, EXEMPTIONS, CIRCLE-1,, AHMEDABAD

आदेश/O R D E R

PER AMARJIT SINGH - AM: The appeal has been filed by the assessee for A.Y. 2014-15, arise from order of the CIT(A)-9, Ahmedabad dated 07.09.2017, in proceedings under section 143(3) of the Income Tax Act, 1961; in short “the Act”.

“1. The Ld. A.O. has erred in law and on facts in applying Proviso to section 2(15) and that assessee is engaged in activity in the nature of business and consequently section 13(8) of Income Tax Act, 1961 and thereby rejecting the applicability of section 11 and 12 claimed by the assessee and the Hon’bleCIT(Appeals) has erred in confirming the decision of learned A.O. 2. The learned A.O. and Hon’ble CIT(Appeals) have erred in law and on facts in rejecting the assessee’s claim that it is engaged in “Education” and hence the provision of Proviso to section 2(15) and section 13(8) are not applicable.

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“I.Section 2(15) : Proviso : Para 1to 7 of notice dt. 13.12.2016) It has been stated in your Honour’s notice under reference in the above paragraphs that our activities are in the nature of general public utility. WE are requested to show cause as to why your activities are not covered by first and second proviso of sec. 2(15) of the I.T. Act, 1961 and therefore why deduction claimed u/s. 11 and 12 may not be disallowed. In respect of the above our submissions are as follows: 1. Whether the Assessee is engaged in the field of ‘education’? 1.1 The assessee is engaged in(i) providing infrastructure for the game of cricket; (ii) education for cricketers for learning intricacies of game of cricket by playing matches and running a coaching academy for teaching the finer aspects of the game to the 3

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budding cricketers. The Assessee carries out various activities for the SOLE purpose of development of the game of cricket in Gujarat. Its activities span the entire year in the conduct of cricket education and promotion related activities. 1.2 The assessee employed various renowned players and umpires for the purposes of imparting knowledge and skills to budding players. These coaches/trainers are paid fees for imparting the practical aspects of the game. 1.3 The assessee wishes to submit that section 2(15) of the Act defines charitable purpose to include relief of the poor, education, medical relief, preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest and the advancement of any other object of general public utility. 1.4 The field of education has evolved and grown by leaps and bounds. The normal connotation of the team ‘education’ cannot be restricted to the scholastic education as enunciated by the Apex Court in the case of Sole Trustee, Lokshikhsana Trust V. CIT [101 ITR 234(SC)]. To put it in the words of House of Lords in the case of IRC vs. Mcmullen, [54 TC 413 (19860] the education man’s ideas about education are not static, but are moving and changing. In taht case the House of Lords held that a trust created to encourage the pupils of schools and universities to play games and sports and thereby give due attention to their physical education and development was one for the advancement of ‘education’ [Source: ‘The law and Practice of Income Tax’ by Kanga, Palkhivala&Vyas – volume 1 (page 532 9th edition)]. 1.5 In its final report (September 1978) the Direct Tax Laws Committee hs observed as under with regard to the meaning of the term ‘education’: “The expression ‘education’ is used in the Income Tax Act whilst defining expression ‘charitable purpose’ in section 2(15). It also appears at other places in the Income tax Act, particularly in some of the exemption provisions. The scope of the term ‘education’ has come up for discussion by the Supreme Court in the case of Sole Trustee, Lokashikshana Trust v CIT. The observations of one of the judges Khanna J. With whom Gupta J generally concurred was taht education in the context of section 2(15) connotes the process of training and developing the knowledge, skill; mind and character of the students by normal schooling. In other words, it is limited to scholastic instruction and does not extent to every acquisition of further knowledge whatever be the medium for such acquisition.” The word ‘education’ in the content of charitable purpose has been used for several decades and has been widely construed since the beginning of the previous century. It has always been under stood as not being limited within an unduly narrow ambit and extending much beyond the narrow compass of mere scholastic instruction. The question as to the extent of the area covered by education would naturally be decided by the court in each case but it well settled law in India and England for several decades that the word is not limited in its character to mere scholastic instructions. The concept of education as explained in the observations of Khanna J are not supported by any judgment of the Supreme Court of India or the Appellate Courts in England. The Court of Appeal in England has in the case of incorporated Council of Law Reporting for England and Wales v Attorney General, sufficiently dealt with the scope of the word ‘education’ and the Supreme Court has not expressed any dissent from that case not is it, referred to in the judgment. As the issue of what constitutes education generally, as opposed to the issue whether the activities if that 4

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particulartrust constituted education was not before the Supreme Court, the observations cannot be construed as laying down the law on what constitutes ‘education’ generally in the context of charitable purpose. “We therefore, recommended that an Explanatory definition of the term ‘Education’ should be introduced with retrospective operation to the effect that ‘Education shall not be restricted to scholastic instruction only’. Since it would be purely clarificatory amendment, it is appropriate that it should be enacted with retrospective effect as from the commencement of the Act.” [Emphasis supplied] 1.6 The terms ‘education’ and ‘schooling’ are being erroneously considered synonymous. Education is much wide in its spectrum. To believe that ‘education’ and ‘schooling’ are that same is ignorance. Mark Twain said “I hae never let my schooling interfere with my education” Schooling is one of the means of education and not the only means. They can never mean the same. The concept that education only means literacy has been constantly redefined. Education is no more a theoretical text book knowledge. It has evolved over a period of time. Education could assume various shades it could be academic, vocational, physical, theoretical, economical etc. To pin down the scope of ‘education’ only to scholastic or academic purpose is not appropriate. 1.7 The assessee is engaged in the development of the game of cricket. This game is not merely a pleasure game today. The ever growing popularity of cricket in India has changed the scenario completely. Cricket is now being pursued as a career. This is evidenced through the increasing number of cricket coaching institutes and summer camps which are seen every nook and corner of the country. This being the case it is a form of education given to those individuals who wish pursue this game as their profession or career. 1.8 Cricket coaching is a subject of physical education. The Gujarat State Education Board have a subject in their syllabus and a student can opt for the same, as one of the qualifying subject, for passing in the Board Exams. 2. Whether the Assessee is a charitable institution being engaged in advancement of any other object of general public utility? 2.1 Without prejudice to our submission above, the Assessee wishes to submit that it is engaged in the activity that is to be treated as advancement of objects of general public utility. The Assessee is covered within the last limb of the definition of charitable purpose u/s. 2(15) which include advancement of any other object of general public utility. Though promotion of games like cricket may not be advantageous to the entire mankind, the promotion of cricket is advantageous to a section of the society which plays, follows and enjoys it. This has been acknowledged by Circular No. 395 dated 24.9.1984 issued by the Central Board of Direct Taxes. 2.2 The, promotion and development of game of cricket is recognised as a charitable purpose falling under the fourth limb of section 2(15). The decision of Cricket Association of Bengal v CIT (1959) 37 ITR 277 (Cal) and Baroda Cricket Associationv ITO (2006) 8 SOT 735 (Ahd) buttress this proposition.

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3.1 The dispute is whether the Assessee is covered within the, gamut of first proviso to section 2(15) which reads as under:

"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''.

3.2 The aforesaid proviso was inserted by Finance Act 2008. The proviso aims to reduce the scope of section 2(15) by narrowing down the objects falling thereunder. It seeks to provide that the objects for advancement of general public utility involving activity will not be charitable any longer. The proviso is therefore restricted only to the fourth limb of section 2(15). The first three limbs fire -unaffected by the proviso. This has been clarified by the CBDT circular No. 11 of 2008 dated09.1223009; the relevant portion of which reads as under:

2.) The newly inserted proviso to section 2(15) will not apply in respect of the first Shree limbs of section 2(15) i.e. relief of the poor, education or medical relief, Consequently where the purpose of a trust or institution is relief of the poor, education or medical relief, it win constitute charitable purpose, even if it incidentally involves the carrying on of commercial activities." 3.3 As submitted earlier, the Assesses is involved in cricket coaching and promotion which is a form of ‘education’ and thereby qualifying itself as ‘charitable institution’undersection2(15). Since the Assessee is carrying on an educational activity the proviso to section 2(15) is not applicable.

Alternative submissions: 3.4 Assuming without ad mining that the Assesses is not involved in carrying out educational activities but is involved in advancement of any other abject of general public utility, the following submissions are made with regard to applicability of the aforesaid proviso in the present case:

3.5 The proviso was inserted with effect from 01.04.2009. Explaining the reason for the substitution of the section 2(15), the Finance Minister in his budget speech dated 29.02. 2008 [298 ITR (St.) 33] staled under: “Charitable purpose, includes relief of the poor, education, medical relief and any other object of general public utility. These activities are tax exempt, as they should be. However, some entities carrying on regular trade, commerce or bit struts or prowling services in relation to any trade, commerce or business and earning incomes have sought to claim that their purposes would also fallunder “’charitable purpose’ Obviously, this was not the intention of Parliament and, hence, I propose to amend the law to exclude the aforesaid cases. Genuine charitable organizations will not in any way be affected." 3.6 From the above, it would be evident that the proviso is not intended to be applicable to genuine charitable organization, which do not carry on regular trade, 6

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commerce or business or rendering service in relation to such trade,, commerce or business. 3.7 Similarly the Memorandum explaining the Finance Bill, 2008 [298 ITR (St.) 190] states that the proviso will apply to entities which are run on commercial lines and not to other charitable organizations. It states: "Streamlining the definition of “charitable purpose” Section 2(15) of the Act defines “charitable purpose” to include relief of the poor, education, medical relief, and the advancement of any other objects of general public utility. He has been noticed that a number of entities operating on commercial lines are claiming exemption on their income either under section 10(23C) or section11oftheAct on the ground that they are charitable institutions. This is based on the argument that they are engaged in the “'advancement of an object of general public utility”as is included in the fourth limb of the current definition of “charitable purposes”. Such a claim, when made in respect of an activity carried out on commercial lines, is contrary to the intention of the provision. With a view to limiting the scope of the, phrase "advancement of any other object of general public utility", it is proposed to amend section 2(15) so as to provide that “the advancement of any other object of general public utility” shall not be a charitable purpose if it involves the carrying on of- (a) any activity in the nature of trade, commerce or business or, (b) any activity of rendering of any service in relation to any trade, commerceorbusinessfor any fee or cess or any other consideration irrespective of the nature of use orapplication of the income from such activity, or the retention of such income by the concerned entity. This amendment will take effect from the 1stday of April, 2009 and will accordingly apply in relation to the assessment year 2009-10 and subsequent assessment years." 3.8 The Finance Minister’s reply to the debate in the LokSabha on the finance Bill 2008 in respect of the above amendment was as under. "6. Clause 3 of the Finance Bill, 2008 seeks to amend the definition of 'charitable purpose' so as to exclude any activity m 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 or use of application, or retention, of the income from such activity. The intention is to limit the benefit to entities which are engaged in activities such as relief of the poor, education, medical relief and any other genuine charitable purpose, and to deny it to purely commercial and business entities which wear the mask of a charity. A number of Honourable Members have written to me expressing their concern on the possible impact of the proposal on Agricultural Produce Market Committees (APMC) or State Agricultural Marketing Boards (SAMB). Since there is no intention to tax such committees or boards, and in order to remove any doubts I propose to insert &new clause (26AAB) in section 10 oftheIncome tax Act to provideexemption to any income of on APMC or SAMB constituted under any law for the time being in force for the purpose of regarding the marketing of agricultural produce. I once again assure the House that genuine charitable organisations will not in any way be affected. The CBDT will, following the usual practice, issue an explanatory circular 7

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containing guidelines for determining whether an entity iscarrying on 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. Whether the purpose is a charitable purpose will depend on the totality of the facts of thecase. Ordinarily Chambers of Commerce and similar organizations rendering services to their members would not be affected by the amendment and their activities would continue to be regarded as “advancement of any other object of general public utility”

3.9 From a cumulative reading of the above, one can discern that the following conditions have to be fulfilled, before the proviso to section 2(15) becomes applicable to an institution. a) The charitable, purpose of the entity should be advancement of any other object of general public utility; b Such advancement should involve the carrying of any activity in the nature of trade, commerce or business, or of rendering any service in relation to any trade, commerce or business for a cess or fee or any other consideration; and c) The entity should run on commercial fines and should not be a genuine charitable organization.

3.10 Additionally the Assessee-association was established prior to the commencement of the Income-tax Act 1961 is covered within the provisions of section 11(1)(b) which exempts income derived from property held under the trust formed only partially for charitable or religious purposes. Under this clause, the exemptionis available, to the extent the income from property held under the trustis applied to charitable or religious purposes. In other words, the trust need not hold its property wholly for charitable or religious purposes, but still be entitled for exemption under section 11.

3.11The effect of proviso to section 2(15) on such trusts[covered under section 11(1)(a) also would vary as compared to trusts covered under section 11(1)(a) [wholly charitable trusts].In case of wholly charitable trusts under section 11(1)(a) if one of the activities of the trust is rendered non-charitable; then the proviso would render the entire entity ineligible for exemption.

3.12 Contrastingly, similar consequences will not ensure in case of an entity (like the Assessee) eligible for exemption under section 11(1)(b). Even if one of the objects is hit by the proviso, the entity can still continue to claim exemption from income held under trust for objects which remain charitable.

3.13 Accordingly, the impact of the proviso is diluted in the present case. Assuring without admitting if one of the objects is considered us 'non charitable'; the whole association cannot be painted as a 'non-charitable' organisation. At this stage it is denied that Assesses is engaged in any business activity.

Role of the Assessee 3.14 In this regard, the Assessed wishes to submit that the impugned MatchIncome' arises from international matches and matches allotted under Indian Premier League (IPL). The Assessee has no role to play in fixing the match, much less the players, the opponent country, dates of match, umpires and other related logistics. All these are within the control of Board of Control for Cricket India (BCCI). The Assessee is an 8

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affiliate of BCCI which is the national governing body for cricket in India. It is one of the organizations which may get the privilege of hosting acricket test or one day internationals. The international matches are allotted to the Assesseeby the BCCI at its discretion. The petitioner has no inherent right to demand the allotment of such matches to be conducted by it,IPL matches are not conducted by the petitioner. IPL matches are organized and conducted by the franchisees.TheAssessee which is affiliated to the BCCI has to make available the stadium at the instance of BCCI and it has no decision making authority as to the schedule / conduct of these matches.

3.15 The frequency of the international matches is very low. In case of all other matches there are no fees orchards collected from the spectators. Apart from the international matches, the Assesses has conducted numerous matches at state level. No fees have been charged in such matches. 3.16 The main object of the Assesses is to promote and develop the game of cricket in the State of Gujarat. None of the objects of the Assessee are commercial or in the nature of business or trade arid all the activities are undertaken with a sole view to promote cricket and not to carry on any activity in the nature of trade, commerce or business.

3.17 It is inevitable that in carrying on the activities certain surplus may ensure. The earning of surplus itself would not mean that the Assessee existed for profit.‘Profits’ means dial surplus over which theowners of the entity have a right to withdraw for any purpose including the personal purpose. Profit making would therefore means private profit. Profit making would not mean the surplus that results from certain activities for which the organization is devoted is ploughed back for the promotion of the very same activities.

3.18 In the Assessee’s case, it has conducted only three matches which have yielded a surplus. It has also conducted numerousmatches where it has incurred a huge loss. The Assesses has notbeenformed find is not carrying onactivities with profit motive. There is no intention to make profits. The objects of Assesses are to profiting the game of cricket in Gujarat. The Surplus if any arising from the activities are solelyutilized for the achievement of its objects and no portion is utilized for distribution of any income or profits. The activities of Assesses are therefore charitable in nature, further, for the reasons given above, the requirements of proviso to section 2(15) would also not be satisfied.

3.19 Further, the proviso to section 2(15) is only intended to exclude operating on commercial lines. The legislative intent was never to disturb the genuine charitable organisations, like the Assessee. To conclude, the is covered within the ambit of section 2(15) and its claim as a charitable organisation is unaffected by file proviso thereunder.

3.20 Before concluding the submissions on this aspect, it may be relevant in peruse the legislative history of taxability ofcricket associations. Section 10(23) [now omitted]exempted any income of an Indian association or institution having as its objectthe control, supervision, regulation or encouragement in India of the games of cricket, hockey, football, tennis or such other notified games. Thus, historically, the legislature has always envisaged an exemption regime for cricket associations Finance Act 1987 revised the existing provision wherein inter alia it required such exempted cricket associations to comply with certain provisions of section 11. 9

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3.21 This indicates the mindset of the legislature. The cricket association engaged in promotion of cricket was alwaysconsidered by the provisions of section 11. It was always considered to be a charitable organisation requiring compliance with conditions laid out in section 11. This express provision is today subsumed within the wide ambit of section 2(15) which embrace cricket associations within its wings. If cricket association isnot charitable entity, then there was no need for the law envisaging compliance with section 11. Being an Assessee which has always been held to be charitable cannot be jettisoned on certain interpretation and inferences. The objective of the association, conduct and documentation sufficiently spell out that the Assesseeis a charitable organisation striving towards welfare and promotion of the game of cricket.

II. Corpus Donation from BCCI: 1. In respect of the claim of Corpus Donation being exempt Assessee submitted Details as under:- In the alternative, (i) was submitted that if the corpus donation is not considered as exempt then analternative submission, it was submitted that capital accretion cannot be held to be income. In the matter Assessee submitted as under:

Taxability of corpus donation being T.V. Subsidy etc 1.1. During the year under consideration. The Assessee received from BCC1 as 'corpus donations'. 1.2 The said amounts have been received by cheques. 1.3 There are two letters of BCCI which acknowledged the payments made to the Assessee to constitute ‘Corpus of the trust’. Further, a resolution passed by the BCCI at its Annual General Meeting held on 29th and 30th of September 2001 was produced. The relevant extract of the resolution is as under. “5. Chairman suggested that as already decided in the Working Committee hence forth the TV subsidies should be sent towards “Corpus Fund” and this decision can also be approved by the members of this meeting. Thereafter the members unanimously approved that henceforth the TV subsidies should be sent by the Brand to the Members Association towards “Corpus Fund” instead of subsidy Fund.” 1.4 The copies of two letters of BCCI are incorporated below:

(a) letter dt. 12.10.2001 ------------------------ Ref. BCCI/A-10/C-103/1302 Date: 12.10.2001 Mr.Vikram Patel, The Hony, Secretary, Gujarat Cricket Association, Ahmedabad. 10

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Dear Sir, As decided in the 72nd Annual General Meeting of the Board of Control for Cricket in India held at Chennai on 29th& 30th September 2001. I am enclosing herewith Cheque No. 950920 dated 12.10.2001 for Rs. 1,38,36,800/- as contribution of the Board towards the Corpus of your association. You are requested to credit this amount to the Corpus Fund of Your Association.

Wishing you all the best, Yours truly, (Kishore Rungta) Hony. Treasure ------------------------------------------------- (b) Letter dt. 13.12.2001 -------------------- Ref: BCCI/A-10/C-103/1313 Date: 13.10.2001

Mr.Vikram Patel, The Hony. Secretary, Gujarat Cricket Assocaition Ahmedabad.

Dear Sir, Vide my letter No. BCCI/A-10/C-103/1302 dated 12.10.2001,I had sent Cheque No. 990920 dated 12.10.2001 for Rs. 1,38,36,800/- as contribution of the Board towards the Corpus of your association. Please sent your acceptance that you are treating this money as Corpus for the purpose of our records. Wishing you all the best, Yours truly,

(Kishore Rungta) Hony. Treasure Emphasis Supplied

1.5 It needs to be clarified that there is no dispute that the payments made were indeed towards TV subsidy and IPL subvention. However, the resolution has amply clarified that the TV subsidy should be treated as ‘corpus fund’.

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1.6 The resolution states that henceforth the TV subsidies should be sent by the Brand to the Members Association towards “Corpus Fund” instead of subsidy Fund. Due weightage needs to be given to the term ‘henceforth’. This indicates all payments (not only for one year but for all subsequent year) after the resolution would assume the character of a ‘corpus’. The intent being so discreetly documented, there was no necessity for mentioning the subsequent payments to be ‘corpus’. The BCCI has definitely stuck to its resolution and the Assessee has accordingly treated the receipt as ‘corpus'. Mere fact that the term ‘corpus fund’ is not specified in every payment does not mean that the ‘spirit’ of resolution is not maintained. Such contention would an ultra technical proposition to deny the claim of the Assessee.

1.7 It may be relevant to quote the observations of the Karnataka High Court in the case of DIT v. Sri Ramakrishna SevaAshrama (2012) 205 Taxman 26 (Kar): “The parliament intended to pass on the benefit of exemption of payment of income tax to the charitable and religious institutions. We are really surprised at the attitudes of these authorities who are over technical in denying the benefit to the deserving institutions, which are rendering laudable services to the rural masses. By not granting tax exemptions, which they deserve, the authorities have hampered the said social activities of the trust and they are made to waste their precious time, energy and money in fighting this litigation. We do not appreciate this attitude on the part of the authorities in denying the benefit which the parliament has given to such persons. Therefore, the Tribunal was fully justified in interfering with such an illegal order and granted the relief to the Assessee for which it is entitled to. Unfortunately, the persons who took a decision to file an appeal, before this Court are wasting the precious time of the trust which could have been used in the social service, public money and the time of this Court is also wasted. This attitude on the part of the department cannot be countenanced. Therefore, we feel it appropriate to impose cost incurred by the. Assessee for fighting litigation so that the department would be more careful in future in taking decision to file appeal in such frivolous cases by ignoring the policy of the Government, viz. National Litigation Policy, 2011."

1.8 The Karnataka High Court has clarified that an Assesses entitled to genuine benefits under the Act should not be hassled by ‘over-technical' contentions by the Revenue, Applying these sentiments in the present case, the Assessee is a genuine charitable organisation working for the development and welfare of cricket. It is in receipt of TV subsidy and IPL subvention fees from BCCI. The amounts received by the Assessee towards subvention cannot come within the indicia of business.

1.9 The Assessee receives the payment from BCCI and has no say in the amount of grant/ payment from BCCI. The payment ofsubvention fees is at the discretion of BCCI. A receipt to be chargeable to tax under the Act must come to the Assessee with a character of 'income'. It must addto the pocket of the Assessee as a profit or gain. Any receipt belonging to other person cannot be regarded as an 'income' in the hands of recipient. In other words, the Assessee must control the useofthe impugned receipt/ sum. The Supreme Court recently in Kanchanganga Sea Foods Ltd. v. CIT (2010) 325 ITR 540 on page 549 of ITR observed "It is trite to say that to constitute income the recipient must have control over it." The impugned sum must be at thedisposal of the Assessee. Only on satisfaction of this essential requirement, a receipt could be regarded as 'income' chargeable to tax under the Act.

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1.10 In the present case, the Assessee does not have &control on the 'quantum’ and 'finding' of subvention fees or subsidies. These payments are given by the BCCI to various, cricket associations across the country for developmental activities. The Assessee receives it on account of its affiliation with BCCI. Further, the payments so received are used by the Assesseefor objectives of the trust (welfare of cricket and cannot render the receipt itself as income.

Inference form the submission of BCCI in ITAY2010-11 1.11 Your Honour, in the assessment proceedings of ITAY 2010-11, have relied on the abovesubject vide letter of the BCCI dated 21.01.2013 furnished to Income Tax Department in its own assessment proceedings to conclude that receipt of TV Subsidy is nothing but revenue sharing on account ofTV and media rights for various matches. Your Honour has stated as under (page 20 of Order for ITAY2010-11): "The TV rights subsidy" is nothing but sale of media rights which were negotiated by the BCCI on behalf of the state associations as it was not possible for the state. associations to negotiate on their own. It is evident from the table above, that since 2001 the BCCI is making payment of 70% of the income from sale of media rights to the state associations. The very nature of the said receipt shows that it cannot be anything but income of the Assessee which is due to the Assessee on account of sale of media rights negotiated by the BCCI on behalf of the various state associations.” 1.12 Your Honour may go through the assessment order of BCCI for ITAY 2010-11, copy of which is furnished to us. In the said order, the department has not accepted the claim of BCCI that it is a profit sharing arrangement. On the contrary it has been held that it is a gratuitous payment i.e. distribution of profit and not sharing of profit. At this stage we state that we are not aware of the outcome in Appellate proceedings in the case of BCCI in the above matter.Therewill be double taxation of the said amount, in the case of BCCIand again the hands of the Assessee, even though order in the case of BCCI. 1.13 Alternative Submission In respect of corpus Donation from BCCI, it is a voluntary contribution from BCCI, as explained herein above. In case it is held that the income of Assessee is not for charitable purpose as defined u/s. 2(15) of Income Tax Act, then the contribution received from BCCI is not ‘income’ within the meaning of section 2(24) (ii). Under section 2(24)(iia), the voluntary contribution are income only when the Public Charitable Trust is existing for a ‘charitable purpose’. If it is held by A.O. that Assessee is not existing for charitable purpose, the contribution from BCCI is not income under Income Tax Act. III. Set off of Brought Forward Deficit: The past losses and unabsorbed depreciation is available for set off. Your Honour is requested to give the set off the same.”

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schooling and the coaching was given only to persons who are interested in the game and who had already reached certain level of competence of the game. The AO has referred the order of CIT(A)-9, Ahmedabad in assessee’s own case for A.Y. 2010-11 and 2011-12 where the CIT(A) has dismissed the appeal of the assessee holding that the assessee was carrying on the activity of ‘advancement of other objects of general public utilities’ and which was in the nature of business, trade, commerce, and not education as claimed by the assessee. Therefore, the assessee was covered by the Provisions of sec. 2(15) read with Proviso 1 and 2 of the I.T. Act. Consequently, the AO has treated the receipts from BCCI to the amount of Rs. 81,18,20,305/- as voluntary contribution and not ‘corpus donation ’ as claimed by the assessee. The AO has also contributed non-mutual income surplus to the amount of Rs. 23,59,094/- as club income of the assessee which was added to the total income of the assessee.

The Ld. Counsel has also furnished a synopsis in which he has referred that the different ground of appeal are covered in favour of the assessee by the aforesaid decision of the ITAT Ahmedabad.

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the Co-ordinate Bench of the ITAT vide ITA nos. 1257/Ahd/2013, 3303/Ahd/2016, 3304/Ahd/2016 and 408/Ahd/2017 and notice that different ground of appeal on identical facts have adjudicated in favour of the assessee as briefly stated below:

Ground No. 1:

Denying exemption u/s. 11 of the Act, by holding that assessee is carrying on business as per proviso to section 2(15):

“31. As we proceed to deal with the impact of insertion of proviso to Section 2(15), we consider it appropriate to look at a coordinate bench decision, in the case of Hoshiarpur Improvement Trust vs. ACIT [(2015) 155 ITD 570 (Asrl)], wherein, speaking through one of us (i.e. the Vice President), the coordinate bench has inter alia, observed as follows. 40. We have noted that there are a large number judicial precedents, in the cases of various other cricket associations- details of which are set out earlier in this order, holding that the proviso to section 2(15) cannot be invoked in the cases of such similarly placed cricket associations. Respectfully following the same, and also for the detailed reasons set out above, we uphold the plea of the assessee. We are not reproducing extracts from these decisions, for the sake of brevity, but we adopt, and concur with, the reasoning of these decisions. When proviso to section 2(15) cannot be invoked on the facts of these cases, the benefits of section 11 & 12, which are declined only by invoking the proviso to section 2(15), could not have been declined on the facts of these cases. 41. We have noted that all the learned representatives have advanced detailed arguments on the proposition that since the assessee cricket associations are engaged in educational activities, it is not really material whether or not the assessee has engaged itself in the activities in the nature of trade, commerce or business. However, in the light of our categorical finding that the assessee cricket associations were not really engaged in the activities in the nature of trade, commerce or business, it is not really necessary to adjudicate on this plea. We leave the questions open for adjudication in a fit case. Conclusion on this issue: 15

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Respectfully following the decision of the Coordinate Bench the ground of appeal of the assessee is allowed.

Ground No. 2: Rejecting appellant’s claim that it is engaged in “Educational” activities:

“41. We have noted that all the learned representatives have advanced detailed arguments on the proposition that since the assessee cricket associations are engaged in educational activities, it is not really material whether or not the assessee has engaged itself in the activities in the nature of trade, commerce or business. However, in the light of our categorical finding that the assessee cricket associations were not really engaged in the activities in the nature of trade, commerce or business, it is not really necessary to adjudicate on this plea. We leave the questions open for adjudication in a fit case.”

Respectfully following the decision of the Coordinate Bench as supra the appeal of the assessee is allowed.

Ground No. 3(i) & 3(ii):-

Not accepting amount of TV subsidy received from BCCI as corpus donation:

ITA No. 2589/AHD/2017 A.Y. 2014-15

assistance of the Ld. Representative we have gone through the aforesaid order and relevant part is reproduced as under:-

“48. In ground no. 3, the assessee has raised the following grievances: (3)(a) The ld. CIT(A) has erred in law and on facts in not accepting the submissions of the assessee with relevant evidences in respect of the claim that the amount received from BCCI, Rs. 20,69,60,338/- is towards corpus donation. Hon. CIT (Appeals) has erred in not considering the BCCI AGM resolution which provides that all future payments by BCCI shall be towards corpus by using work ‘Henceforth’. (b) Alternatively, the ld. CIT(A) has erred in law and on facts when the status of the assessee is held to be AOP and Section 2(15) held to be not applicable, then as per the provisions of Sec. 2(24) (iia) r.w.s. 13(8) an 56, the corpus donation of Rs. 20,69,60,338/- cannot be added as income.”

Respectfully following the decision of the Coordinate Bench as supra this ground of appeal of the assessee is allowed.

Ground No. 3(iii) is not pressed. Therefore, the same is not adjudicated. Accordingly, the same stand dismissed.

Ground No. 4:

Not allowing set off of b/f deficit: 13. It is brought to our notice that Ground No. 4 is consequential in nature. With the assistance of the Ld. Representative we have gone through the aforesaid and relevant part is reproduced as under:-

“1. The learned A.O has erred in law and on facts in applying Proviso to section 2(15) and that assessee is engaged in activity in the nature of business and consequently section 13(8) of Income Tax Act, 1961 and thereby rejecting the applicability of section 11 and 12 claimed by the assessee and the Hon’bleCIT(Appeals) has erred in confirming the decision of learned A.O. 65. In ground no. 7 to 11, the assessee has raised the following grievances: (7) The learned CIT(A) has erred in law and on facts in not allowing the set off of brought forward losses and unabsorbed depreciation which claim is supported by Jurisdictional High Court and other High Courts’ decisions (Amount as may be determined in pursuance to Appellate Orders from A.Y. 2004-05 to 2008-09). (8) The learned CIT(A) has erred in law and on facts denying the deduction of capital expenditure of Rs.4,61,70,970/- as allowable. 17

ITA No. 2589/AHD/2017 A.Y. 2014-15

(9) Alternatively, the learned CIT(A) has erred in law and on fact in not granting deduction of expenditure including depreciation and B/F deficit and unabsorbed depreciation after considering the assessee's income as business income. (10) Alternatively, the learned CIT(A) has erred in law and on facts in not accepting the assessee's claim that if the amount received from BCCI Rs.20,69,60,338/- is not considered as corpus donation then the same should be considered in the nature of grant with special purpose to utilize the same in building infrastructure and promote cricket etc. (11) The learned CIT(A) has erred in law and on facts in not granting deduction of 15% u/s 11(1)(b) as computed after making the additions. 66. As regards ground no. 10 above, this has become infructuous in view of the receipt in question having been held to be in capital field outside the ambit of income. As regards all other grievances noted above, learned counsel fairly states that these are consequential in nature and will require to be taken into account by the Assessing Officer while framing the assessment. We are, therefore, of the considered view that no specific adjudication is required in respect of the same. These grievances are dismissed as infructuous at this stage.” Respectfully following the decision of the Coordinate Bench as above no specific adjudication is required in respect of this ground of appeal, therefore, the same is dismissed as infructuous.

Ground No. 5

Denying exemption of income of club activities on principal of mutuality:

Ground No. 6

Not allowing deduction of capital expenditure:

ITA No. 2589/AHD/2017 A.Y. 2014-15

“77. We find that identical issues came up for our adjudication for the assessment year 2009-10 and we have allowed the plea of the assessee in the terms indicated earlier in this order while dealing with the assessment year 2009-10. We see no reasons to take any other view of the matter for this assessment year. Respectfully following the stand taken for the assessment year 2009-10, we uphold the plea to that extent. As regards allowing the capital expenditure towards object of trust, that issue is infructuous at this stage and will come up for consideration before the Assessing Officer while giving effect to this order and computing income in terms of the Sec. 11. The AO shall deal with the same by way of a speaking order.”

Accordingly, this issue is also restored to the file of the A.O. for adjudicating as directed above by the Coordinate Bench in the case of the assessee itself. Therefore, this ground of appeal is allowed for statistical purpose.

Ground No. 7

Not granting deduction of 15% u/s. 11 (1)(a) of the Act:

“79. In ground no. 5, the assessee has raised the following grievance: The learned A.O. has erred in law and on facts in not allowing 15% of income as per provisions of Act by not considering the addition made to the income (Though such addition is not accepted by assessee) and Hon. CIT(A) has erred in law and on facts in not accepting the claim of the assessee. 80. As regards this grievance, all that learned counsel prays is that a direction may be given to compute the income as per provisions of section 11 of the Act, after giving deduction of 15%. Learned Departmental Representative does not oppose the prayer. We, therefore, direct the Assessing Officer accordingly.”

As directed by the Coordinate Bench ITAT Ahmedabad vide order dated 24.01.2019 the AO is directed to compute the income accordingly. Therefore, this ground of appeal is allowed subject to the terms as above.

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Ground No. 8

Charging of Interest u/s. 234A for four months instead of two months:

Ground No.9

This Order pronounced in Open Court on 30/04/2019

Sd/- Sd/- (MADHUMITA ROY) (AMARJIT SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad: Dated 30/04/2019 TANMAY TRUE COPY आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. राज�व / Revenue 2. आवेदक / Assessee 3. संबं�धत आयकर आयु�त / Concerned CIT 4.आयकर आयु�त- अपील / CIT (A) 5. �वभागीय ��त�न�ध,आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाइल / Guard file.

By order/आदेश से,

उप/सहायक पंजीकार आयकर अपील�य अ�धकरण,अहमदाबाद ।