In a recent ruling, the Income Tax Appellate Tribunal (ITAT), Delhi bench has granted tax relief to retired professional shooter, Abhinav Bindra. The Tribunal bench has held that the former World and Olympic champion is not liable to pay income tax on the rewards received by him from the Centre and the State Governments.
While completing assessment, the Assessing Officer noted that the awards received by the assessee have to be added back to the income of the assessee and the same is taxable as Other Income under section 56 of the Act.
On appeal, the assessee claimed that the said awards are not taxable in the hands of the assessee in the light of CBDT Circular No. 447 dated 22.01.1986.
The department, on the other hand, contended that there is nothing on record to show that the Central Government has approved such awards and tax exemption has been granted to the assessee in respect of awards or rewards covered by such approval.
The first appellate authority relied on the CBDT Circular No. 447 dated 22.01.1986 deleted the addition.
The Revenue approached the Tribunal by contending that the circular is not in existence w.e.f 01.04.2005 as per clarification on Taxability of Awards for Sportmen (Circular No. 2/2014 [F. No. 199/01/2014-ITA-1]).
Dismissing the departmental appeal, the Tribunal held that “the awards received by the assessee are all from Central Government or the State Government. Therefore, subsequent clarification mentioned hereinabove squarely applies on the facts of the case in hand. We, therefore, do not find any reason to interfere with the findings of the ld. CIT(A).”
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