Ex-gratia payment received by ‘Sunil Joshi’ isn’t taxable if BCCI holding sec. 12AA registration: ITAT

Case Details: Sunil Bandacharya Joshi v. DCIT - [2022] 137 taxmann.com 343 (Bangalore - Trib.)

Judiciary and Counsel Details

• • Chandra Poojari, Accountant Member and George George K, Judicial Member
  • Smt. Preethi Patel, Adv. for the Appellant.
  •  Ananda H., Addl.CIT-DR for the Respondent.

Facts of the Case

Assessee was a retired professional cricketer who received ex-gratia payment as a one-time benefit from BCCI. He claimed such amount as capital receipt not liable to be taxed.
During the assessment, AO held that said sum would be taxable under section 56(2)(vii) on the ground that BCCI did not have registration under section 12AA. Accordingly, he made additions to the income of the assessee. On appeal, the Commissioner (Appeal) upheld said addition and further held that said sum was liable to be taxed under section 28(iv). Aggrieved-assessee filed the instant appeal before the Tribunal.

ITAT Held

The Tribunal held that the assessee was paid ex-gratia amount for having played cricket for the country. Since the assessee was a retired cricketer and not rendering any services to BCCI, section 28(iv) would not be applicable.

Further, the sole reason for bringing to tax such a sum was that BCCI was not having registration under section 12AA. However, the assessee contended that registration of BCCI under section 12AA was restored by the Mumbai Bench of Tribunal for the relevant assessment year.

Therefore, in the interest of justice and equity, the case needs to be considered afresh by the AO. Accordingly, AO was directed to examine whether BCCI was having registration under section 12AA for the relevant assessment year and if the satisfied said amount would not be taxable under section 56(2)(vii).

List of Cases Referred to

• • BCCI v. Pr. CIT [2021] 132 taxmann.com 132/[2022] 192 ITD 230 (Mum. – Trib.) (para 5)
  • CIT v. Mahindra and Mahindra Ltd. [2018] 93 taxmann.com 32/255 Taxman 305/404 ITR 1 (SC) (para 5)
  • ITO v. Peetadhipathi Trust [IT Appeal Nos. 1382 & 1535 (Bang.) of 2010, dated 3-1-2012] (para 5).