January 2019

Sections 11, 12 - Tax exemption u/s. 11/12 cannot be denied merely for receiving sponsorship from a corporate business entity.

Jagdish T. Punjabi / Devendra Jain / Tejaswini Ghag
Chartered Accountants

23.  (2018) 66 ITR (Trib.) 82 (Delhi) D.C.I.T. vs. India Olympic Association ITA No.: 1130/DEL/2016 A.Y.: 2011-12 Dated: 19th July, 2018

 

Sections 11, 12 - Tax exemption u/s. 11/12 cannot be denied merely for receiving sponsorship from a corporate business entity.

 

FACTS 


The assessee-society was an Apex sports body for selecting athletes to represent India at Olympic Games, Asian Games and other international athlete meets at these events. It was registered u/s. 12A of the Act. The assessee received an income from sponsorship amounting to Rs. 86 lakh received from Samsung India Electronics Pvt. Ltd for 2010 Asian Games and 2010 Youth Olympic Games. Therefore, the Assessing Officer (AO) formed an opinion that the assessee had carried out the activities for the purposes of general public utility in the nature of trade, commerce or business. The AO further formed a belief that this transaction of the assessee was in the nature of rendering services in relation to business of Samsung in lieu of consideration from Samsung India Electronics Pvt. Ltd.  The AO was convinced that proviso to section 2(15) of the Act squarely applies and hence the assessee does not fall within the category of 'charitable organisation'. Accordingly, benefit u/s. 11/12 of the Act was denied to the assessee. Being aggrieved, the assessee carried the matter before the first appellate authority and reiterated that the proviso to section 2(15) of the Act does not apply in the case of the assessee and the AO had wrongly denied claim of exe

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