Citizens' Issues
BCCI delivers a doosra to I-T authorities, shifts headquarters to Chennai

The world’s richest cricketing body, BCCI, is finding new loopholes to remain a charitable organisation and pay no taxes. Sources confirm that it has shifted its headquarters from Mumbai to Chennai

The Board of Control for Cricket in India (BCCI), the richest cricketing body in the world, has come up with a new trick to evade the tough stand of the Income-Tax (I-T) authorities in Mumbai. According to informed sources, BCCI has shifted its headquarters (or corporate office) to Chennai in order to make a case for moving its tax assessment to that city and has already started the process in that direction. This means that the investigation launched by the I-T officials from Mumbai will have to be transferred to Chennai. BCCI and its politically powerful patrons have already been exerting tremendous pressure on the Mumbai I-T officials in connection with their finding and the cancellation of its tax-exempt status as a "charitable organisation".

Reliable sources tell us that the shift to Chennai occurred just around 15 days ago. This could well mean that the BCCI would seek a re-evaluation of the cancellation of its tax exemptions through I-T officials in Chennai. Our sources, who have knowledge about BCCI's actions, say that it has an income of over Rs400 crore last year but cannot show a single charitable activity, whether it is to discover new talent or hold free cricket-training camps. All its activities are focussed on maximising its revenues.

According to an expert, the Income-Tax Act permits an organisation or an entity to be assessed for tax in another State (by the tax authorities). However, if the entity being assessed can prove that daily operations or board meetings have occurred in another State, then the assessee can request the I-T department for a change in assessment circle.

Interestingly, a little-known fact is that the BCCI was originally registered as a charitable organisation under the Tamil Nadu Societies Registration Act. This probably made it so easy for it to request a change in assessment circle without attracting any publicity or media scrutiny so far. In addition, the BCCI's powerful honorary secretary, N Srinivasan, probably has the clout to ensure this transfer, especially when the Mumbai tax hierarchy is not in a mood to be soft on the cricket body. 

Moneylife contacted BCCI's chief administrator officer (CAO) Ratnakar Shetty, but he refused to comment and abruptly disconnected the call saying we should check with the I-T department. Former BCCI president Jagmohan Dalmiya and former chief selector Kiran More say that they have no knowledge of these developments. The entity's vice-president, Rajiv Shukla wasn't available for comments. However, BCCI's press relation officer, Devendra Prabhudesai stuck to the stance that the sports entity was headquartered in Mumbai.

In late April 2010, all the eight original Indian Premier League (IPL) franchisees-Chennai Super Kings, Deccan Chargers, Delhi Daredevils, Kings XI Punjab, Kolkata Knight Riders, Mumbai Indians, Rajasthan Royals and Royal Challengers Bangalore-each owned either by big corporate houses or Bollywood superstars, came under I-T scrutiny.

The I-T Department wants from BCCI bidding documents, contract agreements for the eight IPL franchisees, disclosure of documents supporting ownership, shareholding, details of players' auction, payments made, deposits made to IPL, BCCI and franchisees, details of income, capital payments made to franchisees and balance sheets, and other receipts related to the IPL.

Suspended IPL commissioner Lalit Modi had recently agreed to give up all documents relating to franchise bids and media rights of the IPL which the BCCI had asked for. After receiving a letter from N Srinivasan, BCCI secretary, Mr Modi agreed to return the missing documents to Mr Shetty, a television channel claimed. This proves that the I-T Department would not have been able to assess the documents earlier as they were still with Mr Modi.

The I-T Act which was amended in 2008 states that an organisation cannot be called a 'charitable' one if it carries on trade, commerce or business. In March 2009, its then chairman, Mr Modi, only made the case stronger for the taxmen by bragging about IPL riches and its ability of crossing the billion dollar mark. At the time, BCCI had made over Rs1,000 crore in 2007-2008. The IPL alone has showed tax deducted at source of Rs91 crore.

One must keep note, when Mr Dalmiya was BCCI's president in 2001 to 2004, he shifted its headquarters from Kolkata to Mumbai and when Union minister of agriculture Sharad Pawar took over, he again shifted it back to Mumbai.

The I-T department officials from Mumbai may have given the BCCI a rough time with their tax scrutiny, particularly with the charitable tax exclusions, but what remains to be seen is how much will the Chennai I-T department officials manage.




7 years ago

Charitable organization ?

I feel like laughing. What charitable things have BCCI done ?

Why should they get tax exemptions ?

Let the cricket lovers and other citizens answer honestly.


7 years ago

IPL, I humbly feel, is a very dynamic & interesting type of cricket wherein different cricketers, Indian & foreign, experienced & young play and it gives the young , upcoming cricketers a chance to play against experienced cricketers, Indian & foreign. A majority of the public love to watch this type of cricket in the stadium and in tv at home in India and abroad. One can see how the crowd in the stadium jumps and dances with joy at regular intervals. As a member of the public I would say that we cricket lovers are not fools to get conned (as someone states). We do know what is worth and what is not worth. It is easy to point fingers at others. In fact, we should thank BCCI and the frachisees of IPL teams for having introduced a lovely , dynamic type of cricket and we were able to watch different types of cricket players.
If the government can give road laying work, toll plazas etc to private parties, why cannot BCCI bring in franchisees to raise funds for running this fine game? Is the government not allowing those private parties to take something in return for their investment? And if the franchisees get something in return for the risk they take in their stakes, what’s wrong in that? It is something like interest which an organization pays for the money brought in by someone with the ultimately objective of promoting cricket of a very different type which majority of cricket lovers and even other sports lovers like. This cannot be called business in my humble opinion (with due respects for opinion of others) . THIS IS ONLY INCIDENTAL TO THE ULTIMATE AIM OF PROMOTING A DYNAMIC, VOLATILE , ENJOYABLE CRICKET WHICH IS ALSO CHALLENGING FOR THE CRICKET PLAYERS.
Every business organization pays interest or dividend and uses the balance for the purpose of achieving its objective. Similarly BCCI gives returns to the franchisees for the risk they take in their investment and uses the balance for the development of cricket. What’s wrong in that?? Can the IT people prove that the balance amount is not used for the promotion of cricket?? It is easy for us to point out fingers at others and speak as if we know all the details. Let us not forget, if put to vote to cricket and other sports lovers, IPL cricket will certainly get the maximum vote as against the other types of cricket – Test and One Day. This of course does not mean Test and One Day are of no use. They have their advantages too.
To conclude, I humbly feel , that giving something in return to franchisees for their investment & risk in only INCIDENTAL to promotion of a lovely, dynamic, volatile, enjoyable cricket and there is no business in this for BCCI. It may be a business for franchisees but certainly not for BCCI which the IT authorities should understand.



In Reply to JAYANT L AASHER 7 years ago

how stupidly innocent!

Col J Frederick

7 years ago

Once a thief always a thief. The adaucity with which this body functions is unbelievable.BCCI AND ITS ACTIVITIES needs to be frozen, all its members and affiliate organisations at national and state level need to be investigated and the IPL of course -seperately.people need to be jailed.The comman man has been conned and is paying for the riches of card board cut out cricketersand of course the maharajas of the BCCI.

Avinash Murkute

7 years ago

Liability never ends as longs as Income Tax authorities are not beholden. No Info or any Sys (Info-Sys) can manipulate if the blood flowing in the arteries and veins of IT officials is not bribe colored.


7 years ago

Let the BCCI change their corporate or registered office to any place. The cases pending if any, prior to this effect to be conducted by the IT of the erstwhile area only. If we allow this then in future each and every one will shift their offices from one place to another without any consideration.
I wonder how this organisation registered as Charitable set up at Chennai and as non-charitable at Mumbai. If it is so then transfer of property or assets or liability from one identity to other itself not possible and the one who transfer it to charitable to prove their sources and pay taxes to their earnings correctly. We have to fix the people behind this type of transactions and cheating in front of the law seriously.
Nothing is impossible if the IT authorities are ready to act sincerely.
We are not advising hem to do like this or that way, be genuine in your action and collect the due tax which is required to be.


Daily Market View: Uptrend still intact

The Sensex will hover around 17,600 before the next move

The market witnessed a subdued closing today, as traders rolled over their position in the derivatives segment from the near-month June contracts to July contracts ahead of the expiry of the near-month June derivatives contracts on Thursday (24th June). The Sensex settled lower at 17,749, down 126 points (0.7%) and the Nifty ended at 5,316, down 36 points (0.7%). The indices started the day on a negative note, taking cues from the Asian markets. Trading was range-bound till mid-morning. The market recovered from there and gained till early afternoon. However, it slid from there to shut in the red.

Asian stocks were down on Tuesday on concerns over Europe's economic crisis after Fitch Ratings cut its debt rating on French bank BNP Paribas SA. Fitch reduced BNP's long-term rating to AA-minus, the fourth-highest investment grade, from AA on deteriorating asset quality. Key benchmark indices in Japan, South Korea, Singapore, Indonesia, Hong Kong and Taiwan fell by 0.2% to 1.2%.

US indices closed lower on Monday. The Dow was down 8.2 points (0.08%) at 10,442. The S&P 500 was down 4.3 points (0.3%) at 1,113. The Nasdaq was down 20.7 points (0.9%) at 2,289.

Japan has set an ambitious target to control its fiscal deficit. The government pledged to do its utmost to keep new debt issuance in the year to next March at or below about 44 trillion yen ($483 billion) that has been earmarked for this year, while aiming to steadily reduce bond issuance thereafter.

Back home, a bumper harvest prospect because of a good monsoon has livened up the possibility that India should lift the export ban on non-basmati rice. India is the world's second-largest exporter of rice. Thailand banned exports of non-basmati rice in 2008, as high prices of the grain put pressure on domestic supply.

The government will decide on the fuel price hike on Friday. Earlier this month, the government deferred a decision on raising fuel prices, the second time in a year, which is a politically-sensitive reform measure.

Foreign institutional investors were net buyers of equities worth Rs1,564 crore on Monday. Domestic institutional investors were net sellers of Rs 561 crore. 

Hindustan Dorr-Oliver (up 0.5%) has joined hands with Bronswerk Heat Transfer BV, Netherlands, a technology and manufacturing company that supplies air-cooled heat exchangers and high-pressure heat exchangers to various process plants, process license holders, plant construction companies and leading global consultants.

L&T (down 0.8%) thermal power plant construction business unit has secured two orders aggregating Rs827 crore from GVK Power for the latter's Gautami Combined Cycle Power Plant Expansion and from SEPCO-I for the Talwandi Sabo Power Plant in Punjab.

JIK Industries (down 2.9%) has successfully commenced its showroom in south Mumbai and is planning expansion in the form of own retail stores, franchise stores, shop-in shop, etc. The company will be focusing on development of new designs and increase of profits in this segment. There is no significant competition in its product profile. The company is considering floating a subsidiary abroad and increase its focus and capabilities in the high-end luxury product segment and export to Europe and the Middle-East.


Technofab IPO opens 29th June

Price band fixed at Rs230-Rs240

The initial public offer (IPO) of Technofab Engineering Ltd, an engineering, procurement & construction (EPC) company, will open on 29th June and close on 2nd July. The shares will be offered at a price band of Rs230 to Rs240.

The company will mop up Rs68.77-Rs71.76 crore, depending on the final issue price.

Between FY07-08 and FY09-10, Technofab\'s sales increased at a compounded annual growth rate (CAGR) of 48% and profit after tax (PAT) increased at a CAGR of 189%. Its order book stands at Rs533.74 crore as on 31 March 2010.

The company said it has placed bids for around 41 projects, worth Rs2,200 crore, in power, oil & gas and steel sectors. It expects to be the lowest bidder for around five projects worth Rs400 crore, all in the power sector.

Technofab has a presence in power, industrial infrastructure, water and oil & gas sectors and is planning to enter the railways and transport segments.

The company has operations in India, Kenya, Ethiopia, Ghana and Fiji. It plans to look for opportunities mainly in countries with projects funded by the World Bank or similar organisations.


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