RISE WORLDWIDE LTD.,MUMBAI vs. DY CIT 2 (2)(1), MUMBAI

INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI BENCH: C BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA 7243/MUM/2019 (िनधा�रण वष�/Assessment Year: 2013-14) Rise Worldwide Ltd. Dy CIT(A)-2(2)(1) (formerly known as IMG Reliance Aayakar Bhavan, Ltd) M K Marg 3rd Floor, Court House, Mumbai-400020, Vs. Lokmanya Tilak Marg, Maharashtra Dhobi Talao, Mumbai-400002, Maharashtra अपीलाथ� Appellant ��थ� Respondent

Permanent Account Number of Assessee: AALCS6150P

अपीलाथ� �ारा/Appellant represented by: Shri Madhur Agarwal, Advocate ��थ� �ारा/Respondent represented by: Shri Rajdeep Singh, CIT DR

सुनवाई की तारीख / Date of conclusion of hearing: 28.07.2026 घोषणा की तारीख / Date of pronouncement: 19.10.2026 आदेश / ORDER PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: This appeal filed by assessee is directed against the order of ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, vide order No. ITBA/NFAC/S/250/2025- 26/1082512652(1) dated 12.11.2025 passed against the assessment order by National e-Assessment Centre u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), dated 24.03.2025 for Assessment Year 2023-24.

ITA 7243/Mum/2019 Rise Worldwide Ltd. (formerly known as IMG Reliance Ltd) Assessment Year 2013-14 1. The learned Commissioner of Income-tax (Appeals-9) [hereinafter referred to as CIT(A)] erred in confirming the action of the Deputy Commissioner of Income-Tax 2(2)(1), Mumbai [hereinafter referred to as AO] in disallowing an annual payment of Rs. 41,15,00,000/- being Commercial Rights Fees paid to Basketball Federation of India (BFI) of Rs. 7,90,00,000/- and All India Football Federation (AIFF) of Rs. 33,25,00,000/- by holding the same as capital in nature. 2. The Appellant submits that the above expenses are incurred for the purpose of business and no enduring benefit has accrued and therefore the same ought to be allowed as revenue expenditure under section 37 of the Act. 3. In the alternative, and without prejudice to ground of appeal No. 1, the learned CIT(A) erred in not allowing the depreciation on the cost of the intangible asset as contemplated u/s 32(1)(ii) of the Act of Rs. 804 crores (BFI Rs. 132 crores and AIFF Rs. 672 crores) being commercial rights fees payable over a period of 15 years. 4. The Appellant submits that the AO ought to have allowed depreciation on the actual cost of asset u/s 32 r.w.s. 43 of the Income tax Act. 5. On the facts and in the circumstances of the case, the learned CIT(A) erred in not appreciating the fact that the issue in the appeal is squarely covered by the order of his predecessor in Appellant's own case for the Assessment Year 2011-12 and 2012-13. 6. The Appellant submits that as a principle of judicial discipline CIT(A) ought to have followed the orders of his predecessor for AY 2011-12 and 2012-13 specially when all the facts and agreements remains the same.

2.1. Assessee intimated change of name in its submission dated 26.05.2021, whereby its name was changed from IMG Reliance Limited to Rise Worldwide Limited with effect from 21.01.2021. In this regard, revised Form 36 along with certificate of incorporation and PAN card copy was placed on record.

ITA 7243/Mum/2019 Rise Worldwide Ltd. (formerly known as IMG Reliance Ltd) Assessment Year 2013-14 in nature on the ground that it gave enduring benefit to assessee and disallowed the sum of Rs. 41,15,00,000/- under revenue head, allowing depreciation thereon by treating the total contract commitment as intangible asset. Aggrieved, assessee went in appeal before ld. CIT(A) who upheld the view of ld. Assessing Officer. Aggrieved, assessee is in appeal before the Tribunal.

ITA 7243/Mum/2019 Rise Worldwide Ltd. (formerly known as IMG Reliance Ltd) Assessment Year 2013-14 AY Assessee’s Assessing Officer CIT(A) ITAT claim 2014-15 Claimed as Notice issued u/s 142(1) NA NA revenue dated 29.06.2016. expenditure Submission filed vide letters dated 25.11.2018 (refer point no. 1) and 30.11.2018 (refer point no. 1). AO after examining the submissions accepted the payments as revenue expenditure and no addition made in the assessment order. 2015-16 Claimed as Notices issued u/s 142(1) NA NA revenue dated 18.10.2018 and expenditure 13.11.2018. Submission filed vide letters dated 31.10.2018 (refer point no. 5) and 19.11.2018 (refer point no. 2) AO after examining the submissions accepted the payments as revenue expenditure and no addition made in the assessment order.

5.1. As could be seen from the above table, assessee has claimed the payments to AIFF and BFI as revenue expenditure in each of the five assessment years. In AY 2011-12 and AY 2012-13, ld. Assessing Officer disallowed the claim by holding it as capital in nature and allowed depreciation by treating the payments as intangible assets. In both the years, ld. CIT(A) held the payments as revenue expenditure. For AY 2011-12, the Department did not file any further appeal. For AY 2012- 13, the Department is in appeal before the Tribunal which is pending. In the year under appeal, i.e., AY 2013-14, ld. Assessing Officer took the same view as in the earlier two years and ld. CIT(A) upheld it. For AY 2014-15 and AY 2015-16, ld. Assessing Officer in the course of assessment proceedings, accepted the payments as revenue expenditure as claimed by the assessee. We now take note of how the matter has taken shape in each of these years.

ITA 7243/Mum/2019 Rise Worldwide Ltd. (formerly known as IMG Reliance Ltd) Assessment Year 2013-14 5.2. Assessment Year 2011-12: In this year, ld. Assessing Officer disallowed Rs. 12,43,19,334/- being commercial rights fees paid to BFI at Rs. 4,68,19,334/- and to AIFF at Rs. 7,75,00,000/-, claimed by the assessee as revenue expenditure u/s 37(1). The same was held to be capital in nature and depreciation was allowed on the actual payment by treating it as an intangible asset. In the first appeal, assessee contended that it had not acquired the rights but had only acquired the rights to use the same on payment of annual commercial rights fee as per agreement. It was submitted that this does not give rise to any enduring benefit in the current year or in future years. It was further submitted that the parties had the right to terminate the agreement if the matches do not take place for two consecutive years and that the agreement can be terminated with immediate effect by giving notice or on breach of any clause. The proprietary rights always continued to be vested in BFI and AIFF. In the alternative, assessee claimed that depreciation should be allowed on the entire cost of acquisition of Rs. 804 crores payable in 15 instalments and not on the actual payment of Rs. 12.43 crores made during the year.

5.2.1. Ld. CIT(A)-14, Mumbai vide order in appeal no. CIT(A)- 14/TT.126/2015-16 dated 22.03.2017 noted that the Tribunal, Mumbai in the case of Indiawin Sports Pvt. Ltd. v. ACIT, CC-35 (ITA Nos. 5290 and 5291/Mum/2014 for AY 2009-10 and 2010-11), following the decision of the Tribunal, Hyderabad in the case of Deccan Chargers, had held the annual franchise fees paid to BCCI to participate in IPL as revenue in nature. It was observed that the facts and circumstances in the assessee’s case are similar as annual payments are made for the commercial rights which are subject to various conditions including termination of the contract on various grounds. Accordingly, respectfully following the decision of the Tribunal, it was held that the

ITA 7243/Mum/2019 Rise Worldwide Ltd. (formerly known as IMG Reliance Ltd) Assessment Year 2013-14 annual payment of Rs. 12,43,19,334/- paid in FY 2010-11 relevant to AY 2011-12 is revenue in nature and was allowed as revenue expenditure. On the alternative claim, it was held that once the commercial rights fee is held as revenue in nature there is no question of allowing depreciation on it. Ld. Assessing Officer was directed to withdraw the depreciation allowed, if any, on such commercial rights fees treated as intangible assets and the alternative claim was dismissed as infructuous. Against this order of ld. CIT(A), the Department did not file any further appeal before the Tribunal.

5.3. Assessment Year 2012-13: The ld. Assessing Officer disallowed the annual payment to BFI and AIFF in the same manner by holding it as capital in nature and allowing depreciation on it as intangible assets. Ld. CIT(A)-56, Mumbai in order in appeal no. CIT(A)-56, Mumbai/11747/2017-18 dealt with this issue under ground no. 4. It was noted that the similar disallowance in the assessee’s own case for AY 2011-12 had been ruled in favour of the assessee in CIT(A)- 14/TT.126/2015-16 dated 22.03.2017. Facts and circumstances remaining identical for this year, it was held that for the same reasons the same decision applies and ld. Assessing Officer was directed to delete the addition. Ground no. 4 was allowed. The alternative ground of the assessee was dismissed as no decision was required in view of the relief granted on this ground. Ground no. 5, relating to consequential benefit of the decision for AY 2011-12, was held to need no adjudication as the issue no longer subsisted.

5.3.1. The Department filed an appeal against the said order of ld. CIT(A) before the Tribunal in ITA No. 6334/Mum/2019 along with Cross Objection No. 69/Mum/2023 filed by the assessee. The same are

ITA 7243/Mum/2019 Rise Worldwide Ltd. (formerly known as IMG Reliance Ltd) Assessment Year 2013-14 pending for hearing before ‘J’ Bench since issues relating to transfer pricing adjustments are involved in those appeals.

5.4. Assessment Year 2014-15: Notice u/s 142(1) was issued by ld. Assessing Officer on 29.06.2016 calling for various details including the issues in the current assessment which may arise out of additions made in the earlier assessment years. In response, assessee furnished its replies vide letters dated 25.11.2016 and 30.11.2016 which are placed in the paper book at pages 120 to 123 and 140. By its letter dated 25.11.2016, assessee pointed out that in AY 2013-14 the disallowance of commercial rights fees claimed as revenue expenditure was Rs. 7.90 crores for BFI and Rs. 33.25 crores for AIFF aggregating to Rs. 41.15 crores and that in AY 2014-15 the claim was Rs. 8.80 crores for BFI and Rs. 25.50 crores for AIFF aggregating to Rs. 34.30 crores. It was also pointed out that depreciation had been allowed on these fees by treating them as intangible assets in AY 2013-14.

5.4.1. On the specific query raised as to why the fees paid to BFI and AIFF should be allowed as revenue expenditure, assessee furnished detailed submissions supported by the agreements. It was explained that the assessee had entered into a 15 year agreement with BFI on 21.06.2010 which grants all commercial rights relating to basketball in India and calls for development of the standards and popularity of the sport in cooperation with BFI. On the further query as to how the amount paid during the year was worked out, assessee explained by its letter dated 30.11.2016 that the payment to AIFF as per contract was Rs. 34 crores out of which Rs. 25.5 crores was paid for three quarters at Rs. 8.5 crores per quarter. The payment for the last quarter was made by FSDL since the agreement with AIFF stood transferred to it in the fourth quarter. After examining the submissions, ld. Assessing Officer

ITA 7243/Mum/2019 Rise Worldwide Ltd. (formerly known as IMG Reliance Ltd) Assessment Year 2013-14 accepted the payments as revenue expenditure and no addition was made in the assessment order.

5.5. Assessment Year 2015-16: Notices u/s 142(1) were issued by ld. Assessing Officer on 18.10.2018 and 13.11.2018 wherein specific queries were raised seeking clarification and explanation on the claim made by the assessee. Assessee furnished detailed replies vide letters dated 31.10.2018 and 19.11.2018 along with documentary evidences. Copies of these notices and the assessment orders for AY 2014-15 and AY 2015-16 have been placed on record. Ld. Assessing Officer, after considering the submissions made by the assessee, accepted the payments as revenue expenditure as claimed and no addition was made.

6.1. From the facts noted above, we find that this very issue in assessee’s own case for AY 2011-12 and AY 2012-13 has already been adjudicated by the predecessor appellate authorities in favour of the assessee by holding the annual commercial rights fee payments as revenue expenditure. The order for AY 2011-12 has attained finality as the Department did not file any further appeal. The order for AY 2012- 13 followed the same reasoning on identical facts and the Department’s appeal against it is pending before the Tribunal on account of transfer pricing issues. No decision of the Tribunal or of any higher forum taking a contrary view in assessee’s own case has been brought to our notice.

ITA 7243/Mum/2019 Rise Worldwide Ltd. (formerly known as IMG Reliance Ltd) Assessment Year 2013-14

6.2. Further, for AY 2014-15 and AY 2015-16 the ld. Assessing Officer, after raising specific queries on the claim and considering the detailed replies and documentary evidences furnished by the assessee, accepted the payments as revenue expenditure. Thus, the Department itself has treated the payments as revenue expenditure in the years immediately succeeding the year under appeal. Revenue has not brought on record any material to demonstrate that facts or terms of contract in the current assessment year under appeal are in any manner different from earlier years. In Radhasoami Satsang, Saharanpur v. CIT [1992] 193 ITR 321 (SC), the Hon’ble Supreme Court held that where a fundamental aspect permeating through different assessment years has been found as a fact one way or the other and the parties have allowed that position to be sustained by not challenging it, it would not be appropriate to allow the position to be changed in a subsequent year. Under principles of judicial consistency, authorities below ought to have followed the view taken in earlier assessment years when facts and agreements remained unchanged.

ITA 7243/Mum/2019 Rise Worldwide Ltd. (formerly known as IMG Reliance Ltd) Assessment Year 2013-14 10. In the result, appeal filed by the assessee is allowed.

Order is pronounced in the open court on 19 October, 2026

Sd/- Sd/- (Saktijit Dey) (Girish Agrawal) Vice President Accountant Member Dated: 19 October, 2026 MP, Sr.P.S. Copy to : 1 The Appellant 2 The Respondent 3 DR, ITAT, Mumbai 4 Guard File 5 CIT BY ORDER, Digitally signed by ABHINAV ABHINAV ANANT ANANT GAVANDE GAVANDE Date: 2026.10.28 13:35:36 +05'30' (Dy./Asstt.Registrar) ITAT, Mumbai