Analysing various provisions the Tribunal held that ; except the  commercial exploitation of rights during the holding of Davis Cup match, there is no dispute that the pre-dominant object of the assessee society is promotion of game of tennis including the selection of players, training of players, and conduct of matches both domestic and international. We, therefore, do not think that the other income of the assessee such as from nominal registration fees or nominal coaching fees which is charged so as to attract only the genuinely interested trainees / players can be said to be its business income as it sans the profit motive. The Ld. Counsel has explained in detail that the holding of matches for commercial purpose is not a regular feature or regular activity of the assessee. Even the Davis Cup was also organized as part of the objects of the assessee and even the incidental income has been ploughed back and applied for carrying the aims and objects of the assessee society. Therefore, in the light of the decision made above, we hold that though the assessee Chandigarh Lawn Tennis Association is carrying out the activities towards the advancement of objects of general public utility, which is its dominant activity, however, it has also involved in carrying out the incidental activity in the nature of trade, commerce or business in the course of actual carrying out of advancement of object of general public utility by way of commercially exploiting the rights of hosting the “Davis Cup Match”. However, as per the amended provisions of section 2(15), 10(23C), 11(4), 11(4A), 13(8) and 143(3) of the Income Tax Act and in view of our discussion and interpretation of the relevant provisions as given above, the income of the assessee from the incidental and commercial activity i.e. income from organizing of Davis Cup up to the limit prescribed as per the second proviso to section 2(15), which for the assessment year under consideration is Rs. 25 lacs, will be treated as income from ‘charitable purposes’ and the assessee will be entitled to claim the exemption u/s 11 of the Act up to that extent in respect of the said income along with other income, if any, from the non-business activity of the assessee. However, the income over and above amount for Rs. 25 lacs from the business activity i.e. from the exploitation of its right to hold Davis Cup will be treated as ‘business income’ of the assessee and will be liable to include in its total income. The assessing officer, therefore, is directed to bifurcate the income from commercial activity and non-commercial activity and assess the income of the assessee as directed above. With the above observations, the appeal of the assessee is treated as partly allowed.( ITA No. 1382/CHD/2016, dt. 26.07.2018)(AY. 2013-14)

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