rediff.com

NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  

Rediff News  All News 
Rediff.com  » Cricket » CAG reveals irregular tax exemptions to cricket associations

CAG reveals irregular tax exemptions to cricket associations

December 13, 2013 17:07 IST

The Income-tax Department has allowed irregular exemptions on TV rights from BCCI to four cricket associations resulting in non-levy of tax to the tune of Rs 37.23 crore, the Comptroller and Auditor General (CAG) said on Friday.

BCCI"The IT Department allowed exemption in four ... cases for income received from TV rights from BCCI in cases of Saurashtra Cricket Association, Baroda Cricket Association, Kerala Cricket Association and Maharashtra Cricket Association resulting in short levy of tax of Rs 37.23 crore," it said in a report tabled in Parliament.

The CAG said that under Section 2 (15) of the Income Tax Act, a public utility activity cannot be treated as "charitable" if it involves carrying on of any activity in the nature of trade, commerce or business.

Referring to the Saurashtra Cricket Association case, CAG said the body has collected TV subsidy of about Rs 35 crore in three years, but spent only a small amount on promotion and development of sport, accumulating Rs 19.44 crore.

"This resulted in under-assessment of Rs 19.44 crore with short levy of tax of Rs 8.45 crore," it said.

Pointing out another instance, the official auditor said that the IT Department allowed irregular exemptions to 30 Trusts involving tax effect of Rs 59.61 crore where voluntary contributions, received without specific directions, were taken to corpus fund instead of treating at income.

"We observed that AOs (assessing officers) allowed treatment of voluntary contribution received without specific directions as income in corpus fund fo the assessees in 30 cases. This resulted in non-levy of tax of Rs 59.61 crore," it said.

© Copyright 2013 PTI. All rights reserved. Republication or redistribution of PTI content, including by framing or similar means, is expressly prohibited without the prior written consent.