One-Time Benefit Received by ‘Kapil Dev’ From BCCI in Recognition of Services is Exempt u/s 56(2)(vii) | ITAT

Case Details: Kapil Dev Nikhanj vs. ACIT - [2025] 173 taxmann.com 100 (Delhi-Trib.)

Judiciary and Counsel Details

• M. Balaganesh, Accountant Member & Ms Madhumita Roy, Judicial Member
• Jasmeet Singh & Saif Ali, Advs., for the Appellant.
• Om Parkash, Sr. DR for the Respondent.

Facts of the Case

Assessee Kapil Dev was a former well-renowned cricketer who had represented India in many international matches worldwide. During the year under consideration, amongst other incomes offered to tax in return, the assessee also offered to tax a sum of Rs 1.50 crores, which he had received from BCCI as a one-time benefit in recognition of his services to Indian cricket on international and domestic levels. The assessment was completed, and the income of assessee was enhanced under the head ‘Income from house property’. However, the assessee did not prefer an appeal against the order of assessment.

Later, the assessee was advised that the one-time benefit received from BCCI in recognition of its past services to Indian cricket is exempt under section 56(2)(vii). The assessee preferred an appeal before CIT(A) with a delay of 1993 days, which stood uncondoned by CIT(A). The matter reached the Delhi Tribunal.

ITAT Held

The Tribunal held that the assessee had voluntarily come forward to offer the one-time benefit received from BCCI to tax in the return of income. However, pursuant to the subsequent developments by way of certain tribunal decisions, the assessee was advised that the said benefit received by the assessee would be exempt from tax in terms of Section 56(2)(vii).

When a statute specifically provides a particular exemption of a particular receipt from tax, the said receipt cannot be brought to tax merely because the assessee had offered erroneously in the return of income. Ultimately, income is to be determined in accordance with the provisions of the Act, and the revenue cannot take advantage of the ignorance of the assessee while determining the taxable income.

It is a fact that this one-time benefit received from BCCI in recognition of services would be eligible for exemption under Section 56(2)(vii) as BCCI is a trust or institution registered under Section 12AA. This fact has been endorsed by the Coordinate Bench in the case of Maninder Singh v. ACIT in ITA No. 6954/Del/2019 for the assessment year 2013-14 dated 06-01-2021. Therefore, the assessee was entitled to exemption under Section 56(2)(vii).

List of Cases Reviewed

• Maninder Singh v. ACIT in ITA No. 6954/Del/2019 dated 6-1-2021[Para 6] – followed.

List of Cases Referred to

• Maninder Singh v. ACIT (another cricketer case) ITA No. 6954/Del/2019 (para 4)
• Goetze (India) Ltd. v. CIT [2006] 157 Taxman 1/284 ITR 323 (SC) (para 5).