Royal Multisports Pvt Ltd Vs ACIT (ITAT Mumbai)
The Mumbai Bench of the Income Tax Appellate Tribunal disposed of appeals filed by Royal Multisports Pvt Ltd for A.Ys. 2010-11 to 2014-15 through a common order. The principal dispute concerned depreciation on Rajasthan Royals franchise rights acquired under the Franchise Agreement with BCCI. The Assessing Officer and CIT(A) had restricted depreciation to franchise fees actually paid during the relevant year, whereas the Tribunal, following the Special Bench decision in the assessee’s case dated 31.10.2025, held that the franchise rights constitute an intangible asset under section 32(1)(ii) and that depreciation is allowable on the entire actual cost of ₹268 crore, subject to adjustments where warranted in subsequent years. The alternate claim for revenue expenditure under section 37(1) was not adjudicated.
The Tribunal upheld the disallowance under section 40A(3) relating to cash payments towards daily allowances to players and support staff, holding that the statutory reference is to the payment or aggregate of payments made to a person in a day and that the assessee failed to establish applicability of any Rule 6DD exception. The Tribunal also upheld disallowances relating to business research expenditure and payments routed through Agilysis IT Services for Mr. Ranjit Barthakur, as the assessee had not adequately established the actual services rendered and business purpose.
