The name Sachin Tendulkar is synonymous with cricket, but the legendary batsman once scored a major victory off the field by successfully arguing he was an 'artist' and 'actor' for tax purposes. This fascinating case before the Income Tax Appellate Tribunal (ITAT) allowed the Master Blaster to claim a significant tax deduction on his foreign endorsement earnings, a move that saved him approximately ₹58 lakh on the income he made between 2001-02 and 2004-05. Was this a clever use of a tax provision or an unprecedented loophole masterclass?

The Legal Googly: Section 80RR and Foreign Income

The dispute centered on Section 80RR of the Income Tax Act, which, at the time, offered a substantial tax relief (up to 30% deduction) to specific professionals like authors, musicians, artists, actors, and sportsmen who earned income in convertible foreign exchange from their professional work abroad. The provision aimed to incentivise Indian talent to gain international recognition.

Between 2001 and 2005, Tendulkar had received a substantial amount—nearly ₹5.92 crore—in foreign exchange from global brands like PepsiCo, ESPN-Star Sports, and VISA for various endorsements and commercials. He claimed the deduction under Section 80RR.

The Income Tax Department’s Bouncer

The Income Tax Assessing Officer (AO) immediately rejected Tendulkar's claim, bowling a sharp bouncer at the cricket legend.

The department’s argument was straightforward:

1. Cricketer, Not Actor: Tendulkar’s primary profession was that of a cricketer. His income from advertisements was merely incidental to his fame as a sportsman.

2. Endorsements Are Not Sport: The money was paid for his appearance in commercials, not for playing cricket internationally, which was the intended scope for 'sportsmen' under the section. Merely endorsing a product, they argued, does not make him an actor or artist.

The department contended that the endorsement money should be taxed fully, treating it as 'Income from Other Sources,' not professional earnings eligible for the 80RR deduction.

Sachin’s Unorthodox Defence: 'I Am an Artist'

Never one to back down from a challenge, Tendulkar, through his counsel, presented a unique and highly creative defence that effectively redefined his role in front of the camera.

His argument hinged on two key points:

• Multiple Professions: A person can have more than one profession. He argued that while he was a cricketer on the field, he was functioning as an 'actor' or 'model' when he faced the camera for commercials. He even declared his income from playing cricket as 'Income from Other Sources,' while his endorsement income was listed under 'Income from Business/Profession.'

• Artistic Skill Required: He asserted that appearing in an advertisement or commercial was an artistic performance that required a degree of imagination, creativity, and skill—qualities essential to the profession of an artist or actor. Not every cricketer could perform effectively in an advertisement, proving a unique, non-cricketing skill was at play.

The ITAT’s Verdict: A Tax Law Sixer

The Income Tax Appellate Tribunal (ITAT) ultimately sided with the Master Blaster. The Tribunal delivered a landmark ruling, agreeing with Tendulkar's interpretation.

The ITAT observed that while Tendulkar’s cricketing success certainly added to his brand value, his appearances in commercials required him to use his own unique skills, imagination, and creativity—qualities that qualified the activity as an 'artistic' profession. The ruling stated that there was no bar on an individual having a second profession, in this case, being an artist, apart from playing cricket.

By classifying his foreign endorsement earnings as income derived from the 'profession of an artist,' the ITAT allowed him the deduction under Section 80RR. This legal sixer set a unique precedent, allowing Tendulkar to save the claimed tax amount. This case remains a legendary example of how astute legal counsel and creative interpretation can turn a narrow tax provision into a major financial victory.
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