DCIT(E), CIRCLE-1(1), NEW DELHI vs. DELHI & DISTRICT CIRCKET ASSOCIATION, NEW DELHI

The grounds raised by the revenue are as follows:- (i) On the facts & in the circumstances of the case and in law, Ld CIT (A) has erred in directing the AO to allow exemption us. 11 of the Act particularly when the assessee has shown receipts from Sponsorship Income, Sale of Liquor, Income from Corporate Boxes and Sale of Tickets which are purely commercial in nature. (ii) On the facts and in circumstances of the case and in law, Id CIT (A) has erred in treating Prior Period Expenses, Provisions for Gratuity and Leave Encashment as consequential to allowing exemption to the assessee ignoring the fact that such expenses are not incurred during the year and cannot be treated as application of income. (iii) On the facts and in circumstances of the case and in law, Ld CIT(A) has erred in deleting the addition made u/s 40(A) (3) of the Income Tax Act, such addition being consequential in nature to disallowance of benefit of exemption to the assessee.

The ld. Senior DR supporting the action of the Assessing Officer submitted that Ld CIT (A) has erred in directing the AO to allow exemption us. 11 of the Act particularly when the assessee has shown receipts from Sponsorship Income, Sale of Liquor, Income from Corporate Boxes and Sale of Tickets which are purely commercial in nature. He further submitted that, Id CIT (A) has erred in treating Prior Period Expenses, Provisions for Gratuity and Leave Encashment as consequential to allowing exemption to the assessee ignoring the fact that such expenses are not incurred during the year and cannot be treated as application of income. It is also submitted that Ld CIT(A) has erred in deleting the addition made u/s 40(A) (3) of the Income Tax Act, such addition being consequential in nature to disallowance of benefit of exemption to the assessee. The ld. Senior DR submitted that the ld. First Appellate Authority has granted relief to the assessee without any basis therefore impugned order may kindly be set aside by restoring that of the Assessing Officer.

The ld. counsel submitted brief synopsis which read as follows:-

2. In the present case, AO has made the additions and denied the exemption claimed by the assessee on the basis of order dated 21.05.2012 passed by the DIT(E) withdrawing the registration under section 12A granted to the assessee and subsequent assessment orders passed for the AY 2009-10 to AY 2013-14 on the basis of that withdrawal order. (Page 2 Para 3) 3. The CIT(A) has deleted the additions and allowed the exemption on the ground that the registration granted to the assessee was subsequently restored by Hon'ble Tribunal bearing dated 13.01.2015. He has also relied upon the judgement of ITAT Delhi for the AY 2009-10 bearing IT No. 5809/Del/2014 dated 23.06.2017 wherein the addition made by the AO were deleted and exemption claimed by the assessee was granted.