ITO (E) Vs Board of Control for Cricket in India (ITAT Mumbai)
The Income Tax Appellate Tribunal (ITAT), Mumbai, decided the Revenue’s appeal against the order of the Commissioner of Income-tax (Appeals) [CIT(A)] relating to Assessment Year 1996-97. The appeal challenged the CIT(A)’s findings that PILCOM was merely a managing committee forming part of the Board of Control for Cricket in India (BCCI), the deletion of various additions made by the Assessing Officer (AO), and the direction to assess the income substantively in the hands of BCCI.
The assessee, BCCI, is a non-profit society engaged in promoting cricket and had been notified for exemption under Section 10(23) of the Income-tax Act. The 1996 Cricket World Cup was co-hosted by India, Pakistan, and Sri Lanka. For coordinating common receipts and expenses relating to the tournament, the three cricket boards constituted a committee known as PILCOM. BCCI disclosed the surplus arising from matches played in India in its return of income.
The AO treated PILCOM as an independent taxable entity and computed income by including receipts and surplus relating not only to matches played in India but also to matches played outside India. Protective additions aggregating approximately Rs.98.05 crore were made in BCCI’s assessment. These included additions representing the credit balance in the Citibank, London account, title sponsorship receipts, estimated accrued interest, and surplus from all 37 World Cup matches. At the same time, the AO excluded the World Cup income already disclosed by BCCI from its substantive assessment and denied exemption under Section 10(23) in respect of the protective additions.
