DCIT, CHENNAI vs. M/S. TAMIL NADU TENNIS ASSOCIATION, CHENNAI

Both the appeals of the Revenue are directed against the respective orders of the Commissioner of Income Tax (Appeals)-17, dated 30.03.2016 and pertain to assessment years 2011-12 and 2012-13. The assessee has also filed cross-objections against the appeals and the cross-objections together and disposing of the same by this common order.

The first issue arises for consideration is exemption claimed by the assessee under Section 11 of the Income-tax Act, 1961 (in short 'the Act') in respect of income on sale of tickets, facility fee and sponsorship fee, etc.

Smt. C. Yamuna, the Ld. Departmental Representative, submitted that for the assessment years 2009-10 and 2010-11, in the assessee's own case, this Tribunal in & 1758/Mds/2013 vide its order dated 28.11.2014, found that the income on sale of tickets, facility fee and sponsorship receipts, etc. are eligible for exemption under Section 11 of the Act. According to the Ld. D.R., the Department has already filed an appeal and the matter is pending before the High Court. According to the Ld. D.R., when the object of the assessee was general public utility, the income derived by the assessee from sale of tickets, facility fee, sponsorship fee, etc. are in the nature of trade or income from business, therefore, it is hit by first proviso to Section 2(15) of the Act. Since, admittedly, total receipts exceeded ₹25 lakhs, according Section 11 of the Act.

We heard Shri S. Sridhar, the Ld.counsel for the assessee also. This issue was examined elaborately by this Tribunal in the assessee's own case for the assessment years 2009-10 and 2010-

This Tribunal found that the assessee is eligible for exemption in respect of receipts from sale of tickets, facility fee and sponsorship fees. Since the co-ordinate Bench of this Tribunal examined this issue elaborately in the assessee's own case for assessment years 2009-10 and 2010-11, this Tribunal is of the considered opinion that mere pendency of appeal before the High Court cannot be a reason to take a different view. Since the CIT(Appeals) has rightly followed the order of the co-ordinate Bench of this Tribunal in the assessee's own case for the assessment years 2009-10 and 2010-11, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.

In the cross-objections, the assessee has raised the issue of depreciation. and Smt. C. Yamuna, the Ld. Departmental Representative. The Assessing Officer disallowed the claim of the assessee for depreciation under Section 32 of the Act on the ground that the cost of asset was already allowed as application of income when the asset was acquired. In fact, the CIT(Appeals) has placed his reliance on the order of this Tribunal. Now, the Apex Court in the case of CIT v. Rajasthan And Gujarati Charitable Foundation Poona in Civil Appeal No.7186 of 2014, found that even though the cost of the asset was allowed as application of income in the year in which the asset was acquired, the income of the trust has to be computed commercially by allowing depreciation as provided under Section 32 of the Act. In view of this judgment of the Apex Court, we are unable to uphold the order of the lower authority. Accordingly, the orders of both the authorities below are set aside and the Assessing Officer is directed to allow depreciation under Section 32 of the Act.

In the result, both the appeals of the Revenue stand dismissed. However, both the cross-objections of the assessee stand allowed.