ITAT Gold for Abhinav Bhindra
Legal Corner Icon — the image was hosted by the publisher and was not captured.ABHINAV Bindra is the first person in the history of independent India to have won the Olympic Gold Medal.In 2008, when he brought the First individual gold for India, the whole of India was elated and the picture shows the then President of India stroking his cheek like an affectionate grandma.
For winning that Olympic Gold, he received an amount of Rs. 4,81,63,380/- from governments, local authorities, Trusts, corporates and individuals.
The Income Tax department is not impressed with Olympic gold - you can't play games with Income Tax - they want their tax.
Abhinav Bhindra as an assessee told the AO that the entire sum of Rs.4,81,63,380/- is not income for which he relied upon the CBDT vide Circular No.447 dated 22nd January, 1986. The Assessing Officer treated this Circular to be inapplicable because of amendment in Section 10(17A) and insertion of Section 56(2)(v). However, he accepted the receipt of reward/prize/gifts from the government, local authorities and trusts/funds recognized under Section 10(23C) or registered under Section 12AA to be exempt. He, therefore, added the sum of Rs.63,10,601/- to be the income of the assessee under Section 56(2)(v).
He is a sportsman and not one to give up easily. On appeal, the CIT(A) enhanced the income by the sum of Rs.2,34,00,000/- being the awards/rewards received from various governments.
He made a second appeal to the ITAT.
The CBDT Circular clarified that awards in the cases of a sportsman, who is not a professional, will not be liable to tax in his hands as it would not be in the nature of income.
In the ITAT, the DR argued that the CBDT Circular relied on by the assessee is dated 22nd January 1986. Much water has flown thereafter. The assessee pleads that the Circular has not been withdrawn and the DR does not rebut. So the Tribunal proceeded with the belief that the Circular was not withdrawn.
In a landmark order delivered on Friday, the ITAT held,
"Shri Abhinav Bindra is the first person in the history of independent India to have won the Olympic Gold Medal. In a country whose population is more than 100 crores, if a sportsman who is not a professional sportsman has won the gold medal for the first time after 60 years of independence of the country and he has been given the awards/rewards/prizes mainly by various governments, local authorities, trusts and institutions and of course some corporate/individuals, a liberal construction of Circular No.447 is required. Considering the facts of the case and the nature and spirit of Circular No.447, we hold that in the case of the assessee, viz., Shri Abhinav Bindra, all the rewards/prizes/gifts received by him are covered by Circular No.447 dated 22nd January, 1986 and, therefore, should not be treated as income in his hands. Accordingly, the addition of Rs.63,10,601/- made by the Assessing Officer and the enhancement of Rs.2,34,00,000/- made by the learned CIT(A) is deleted."
Let us hope, the Income Tax Department does not take the case to the High Court.