Case Law Details
There can hardly be any dispute that the assessee is a cricketer receiving match fees/retainerships from various cricket bodies as declared under the head ‘income from business and profession’. The assessee has further claimed the impugned expenditure against the same in two assessment years in question. Learned counsel representing assessee clarifies that the assessing authority itself had verified correctness of the impugned expenses. The same however does not emanate from the assessment order. We further find that neither the Assessing Officer nor the CIT(A) has sought to establish a direct nexus between assessees professional income from playing cricket along with his expenditure in question claimed u/s.37 of the Act. It is not out of place for us to refer to the above statutory provision allowing deduction of expenses which are wholly and exclusively incurred for the purpose of the business. It is evident to us that the learned CIT(A) has merely drawn his conclusions qua genuineness aspect instead of establishing the above stated nexus between each head of expenditure vis-а-vis assessee’ s taxable income declared. We deem it appropriate in these facts and circumstances that the issue in question requires Assessing Officer’s re-adjudication in accordance with law after affording adequate opportunity of hearing to the assessee so as to prove the above direct nexus. We thus accept Revenue’s sole substantive ground for statistical purposes in both assessment years.
RELEVANT EXTRACT OF THE JUDGMENT
3. We come to relevant facts now. This assessee derives income from playing cricket sport, sponsorship and marketing. He claimed various expenses under the head business development, office, salary, office rent, other interests, petrol expenses, repair/maintenance, telephone, travelling, vehicle, stationary and depreciation totaling to Rs.3 1,73,928/- in former and 45,88,255/- in latter assessment year against earning of income from playing cricket sport. The Assessing Officer sought his justification so as to prove a direct nexus between the above expenses and the income in question. The asses see’s identical reply in both assessment years pleaded that he received various incomes from endorsement contract executed with BCCI, GCA, RIL as declared under the head ‘ income from business & profession’. He sought to clarify that the expenditure in question was to over look his personal/professional aspect like conveyancing, legal matters, laisoning and physical fitness etc. in order to remain professionally fit to play the above cricket sport. The Assessing Officer declined to accept the same on the ground that since the assessee had been deriving match fee and retainerships from various cricket bodies, they did not involve any business or professional activity. He further reiterated that assessee’ s playing cricket was not akin to a trading or manufacturing or any service activity. The Assessing Officer thereafter concluded that the expenditure in question is not attributable to any business or profession so as to be termed as business expenditure allowable under the provisions of the Act. All this resulted in disallowance of expenses hereinabove in the two assessment years in question.
4. The assessee preferred appeal. The CIT(A) partly reverses Assessing Officer’s action in both assessment years as indicated in Revenue’s pleadings as under:
“3. Decision:-
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