Itxa/929/2017 Of Pr. Commissioner Of Income Tax-1 v. The Cricket Club Of India

Priya Soparkar 1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.929 OF 2017 Pr. Commissioner of Income-Tax-1 … Appellant V/s. The Cricket Club of India… Respondent --- Mr.Suresh Kumar with Ms.Swapna Gokhale andMs.Sumandevi Yadav for the Appellant.Mr.R.Murlidharan i/by Mr.Atul Jasani for the Respondent. --- CORAM : AKIL KURESHI AND S.J.KATHAWALLA, JJ. DATE : JUNE 06, 2019. P.C.:- 1.This appeal is filed by the revenue to challenge thejudgment of the Income Tax Appellate Tribunal (“Tribunal”for short). Following question is presented for ourconsideration:- “Whether on the facts and circumstances ofthe case and in law, the ITAT was correct inholding that expenditure incurred by wayof renovation and Interior work of Stadium,construction of foundation of camera,staircase, control room, fabrication anderection of structural steels, fixing of MSsliding gates, different pipes for sprinklersystem in the main ground, excavation ofsoil, purchasing of LED Reply screen, electric materials etc. for upgrading the stadium inaccordance with ICC Standards, does notconstitute Capital expenditure when thebenefit derived is of enduring nature? 2.Brief facts are as under:- Respondent-assessee is the Cricket Club of India. The assessee had filed the return of income forassessment year 2007-2008. While scrutinizing thereturn, the Assessing Officer noticed that the assesseehad incurred expenditure of Rs.3.91 crores (rounded off)in upgradation of the cricket stadium and various otherincidental requirements. The Assessing Officer was of theopinion that the expenditure was capital in nature andtherefore, disallowed the same. The assessee carriedthe matter in appeal. CIT (Appeals) allowed part of theclaim and restricted the disallowance to Rs.1.85 crores.Both sides carried the matter in appeal before theTribunal. The Tribunal allowed the assessee’s appeal anddismissed the revenue’s appeal upon which the presentappeal has been filed. Priya Soparkar 3905 itxa 929-17-o 3.Perusal of the materials on record and in particularthe impugned judgment of the Tribunal would show thatthe respondent-assessee had organized several matchesof ICC Champion’s Trophy. In order to do so, the assesseehad undertaken upgradation of the stadium whichincluded arranging the facility for training and warm upareas, providing passages, walk ways, staircase etc.,improving the media facility, installation of electronicscore board and other similar facilities. The board hadalso expended in providing proper security and carparking facilities. It was in this background the Tribunalhad held that the expenditure was revenue in nature. 4.Looking to the nature of expenditure, it can be seenthat the assessee did not create a new asset or create asource of enduring benefit. Essentially, the expenditurewas for upgradation of the existing facilities. Noquestion of law arises. Income Tax appeal is dismissed. (S.J.KATHAWALLA, J.) (AKIL KURESHI, J.)….