Franchise fee would be in the nature of revenue expenditure where payment of Franchise fee facilitated participation in league and operating team is restricted only to year to which payment pertained, and there is neither creation of asset or generation of benefit of enduring nature in hands of assessee. When no match of IPL Season-2 was played till 31.03.2009, no expenditure in respect of Franchise fee accrued at all during year under consideration—Thus, it could not be held as revenue expenditure in hands of assessee during year under consideration. (AY.2009-10)
Knight Riders Sports Pvt. Ltd. v. ACIT (2017) 51 CCH 591 / (2018) 193 TTJ 313 (Mum.)(Trib.)
S. 37(1) : Business expenditure–Capital or revenue-Franchise fee- For participation in league–Held to be revenue expenditure- When no match of IPL Season-2 was played till 31.03.2009, no expenditure in respect of Franchise fee accrued at all during year under consideration—Thus, it could not be held as revenue expenditure in hands of assessee during year under consideration [S. 145]