ACIT (E), NEW DELHI vs. DELHI & DISTRICT CRICKET ASSOCIATION, NEW DELHI

Brief facts of the case are that the assessee is an Association established to encourage and promote the game of cricket in the province of Delhi and district of Karnal which was registered under section 12 A of the Income Tax Act, 1961 (for short “the Act”). The registration was, however, withdrawn w.e.f. 1.4.2009 for assessment year 2009-10 onwards, to be restored by the Tribunal vide order dated 13.01.2015.

For assessment year 2011-12, the assessee filed the return of income on 17.02.2012 declaring nil income but the assessing officer determined income of the assessee by making certain additions on account of TV sponsorship fee received from BCCI, prior period expenses, disallowance under section 40A (3) of the Act, depreciation as per Companies Act etc on the ground that the assessee is involved in the business activities as per proviso 1 and 2 of Section 2(15) of the Act because the assessee had received sponsorship fee, casual membership fee, permanent membership fee, rent from the ground, collection from the health club, ticket sale from public and corporate houses etc.

Aggrieved by the same assessee preferred an appeal. Ld. CIT(A) vide impugned order, while following the decisions of the Tribunal for earlier years as well as his own orders for the Assessment Year 2012-13, reached a conclusion that the assessee is not carrying on activities with any profit motive or with any self-interest and the contribution received by way of sponsorship, advisement, sale of tickets etc and user charges on the facts of this case, do not convert the charitable activity into trade, commerce or business activity and consequently directed the Assessing Officer to allow exemption under section 11 to the assessee with all consequential benefits.

Challenging the said findings of the Ld. CIT(A), Revenue preferred this appeal contending that the assessee had shown receipts from sponsorship income, sale of liquor, income from corporate boxes, sale of