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The assessee-company had entered into an IPL time of making assessment, assessee did not
Franchise Agreement with Board of Control disclose existence of PE of its parent company
of Cricket (BCCI) for Franchise rights of IPL in India and as a result, Assessing Officer
team, named as Kolkata Knight Riders (‘KKR’). could not examine as to whether tax was
deductible at source while making remittances
Assessing Officer (AO) observed that as per
the agreement between the assessee and BCCI, to parent company located abroad, it was to
the assessee was to pay annual franchise fee be regarded as a valid ground for reopening
for the period 2008-17. of assessment.
AO held that the Franchise fee was a part Order by SetCom was conclusive in
of the consideration which was paid by the nature & couldn’t be reopened in
assessee for owning the IPL team and not as
a fee for playing the IPL matches, therefore, any proceedings under any law
the same was a capital expenditure.
Shree Ganpati Synthetics (P.) Ltd. v. Asstt.
The Mumbai ITAT held that the payment of CIT [2018] 89 taxmann.com 46 (Amritsar -
the Franchise fee by the assessee as per the Trib.)
terms contemplated in the franchise agreement
enabled it to participate in the tournament Assessee filed application before Settlement
for the subject years and earn revenue from Commission under section 245C. Settlement
the same. Commission passed an assessment order of
assessing income at certain amount under
The payment was in the nature of recurring section 245D(4). However, CIT(A) upheld
annual payment which was paid to facilitate order passed by Assessing officer (AO) and
participation in the IPL and operating the assessed income at amount determined by
team only for the year for which the payment AO before passing of order by Settlement
was made. Commission.
Since payment of said fee was restricted ITAT held that the order passed by Settlement
only to year for which payment was made, Commission under section 245D(4) was
it could safely be concluded that by making conclusive as to matter stated therein and
such payment there was neither a creation no matter covered by such order could be
of an asset or generation of a benefit of reopened in any proceeding under this Act
an enduring nature in hands of assessee. or under any law for the time being in force.
Therefore, assessee’s claim for deduction of
same as revenue expenditure under section Income earned on sale of agriculture
37(1) was to be allowed.
land after levelling it isn’t agricultur-
SC granted SLP to decide whether al income: Kerala HC
non-disclosure of existence of PE V.A. Jose v. Dy. CIT [2018] 89 taxmann.com
was valid ground to reopen assess- 2 (Ker.)
ment Assessee-NRI had purchased a piece of land
in India in year 2006. He sold same in year
Principal Officer LG Electronics India (P.) 2008 after levelling it. Assessee claimed that
Ltd. v. Asstt. CIT [2018] 89 taxmann.com land being in nature of agricultural land,
39 (SC)
income arising from sale of it would be
The Supreme Court of India granted SLP exempt from tax.
against High Court’s ruling that where at
167
January 20 To January 26, 2018 u Taxmann’s Corporate Professionals Today u Vol. 41 u 61
