MANINDER SINGH,NEW DELHI vs. ACIT CIRCLE-59(1), NEW DELHI

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ITA 6954/DEL/2019Status: DisposedITAT Delhi06 January 2021AY 2013-144 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the payment received from BCCI is exempt from tax. This is because BCCI is a registered trust under Section 12AA of the Income Tax Act, and the second proviso to Section 56(2)(vii) exempts sums received from such entities.

What were the facts?

The assessee, a former Indian cricketer, received a one-time reward of Rs. 75,09,600/- from BCCI for his services. He did not include this amount in his return, relying on an old CBDT circular. The AO, however, added this amount to his income, citing a superseding circular.

What were the issues?

The key issue was whether the one-time reward received from BCCI was taxable income or exempt under the provisions of the Income Tax Act, considering the nature of the payer.

Which sections of the Income-tax Act were involved?

Section 56(2)(vii)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘E’, NEW DELHI

Before: SH. N. K. BILLAIYA & SH. SUDHANSHU SRIVASTAVA

For Appellant: CA Ms. Simran Grewal, CA
For Respondent: Ms. Rakhi Vimal, Sr. DR
Hearing: 06/01/2021Pronounced: 06/01/2021

This appeal by the assessee is preferred against the order of the CIT(A)-19, New Delhi dated 25.06.2019 pertaining to A.Y. 2013-14.

2.

The solitary grievance of the assessee is that the CIT(A) erred in confirming the addition of Rs.75,09,600/- u/s. 56 (2) (vii) of the Act on account of receipt of one time reward from BCCI.

3.

The appellant is a well known former Indian cricketer. During the year he received an award from BCCI an amount of Rs.75,09,600/- towards one-time benefit payment to former cricketers in recognition of the services to Indian Cricket.

4.

The assessee did not include this amount in his return of income. Strongly placing reliance on the CBDT circular No.447 dated 22.01.1986.

5.

The AO during the course of the assessment proceedings dismissed this reliance and referred to CBDT Circular No.2 of 2014 and pointed out that circular No.447 dated 22.01.1986 has been superseded and added the amount of Rs.75,09,600/- to the total income of the assessee.

6.

The assessee carried the matter before the CIT(A) but without any success.

7.

Representatives of both the sides were heard at length. Case record carefully perused. The bone of contention is whether the onetime payment received from BCCI is exempt from tax or not. The answer lies in the provisions of section 56 (2) (vii) second proviso which states that “clause (vii) was not apply to any some of money or any property received from (g) any trust or institution registered u/s.12 AA”.

8.

We find that BCCI is a registered trust u/s.12 AA and the said evidence is available in the public domain.

9.

In the light of the aforementioned facts we do not find any merit in the impugned addition and accordingly direct the AO to delete the addition of Rs.75,09,600/-.

10.

In the result, the appeal filed by the assessee is allowed.

11.

Decision announced in the open court in the presence of both the representatives on 06.01.2021.

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