A a Rs 118-crore demand for assessemnt year 2007-08 was raised on BCCI , out of which department has already recovered Rs 92 crore. The reason for such demands on BCCI , which until sometime ago was claiming all its income exempt u/s 11 of the I T Act , is that from 2007-08 , the status of the BCCI in eyes of department has changed on account of variataion in objectives set out by it.
Section 11 of the I T Act exempts income earned by organisation whose agenda is not to earn profit but using all money for furtherance of specified public charitable services . But BCCI changed its objectives to include establishing coaching academies and holding 20-over matches , immortalized as the Indian Premier League, a hugely successful BCCI property that successfully completed its third season this year. Thus the pain of paying tax !
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This effectively means the board will have little choice but to pay up the bulk of the more than Rs 500 crore in taxes demand for 2008-09 and 2009-10 , the tax department official added.
The I-T department’s claims include tax on income BCCI earned from IPL during the period. BCCI is contesting the decision of the tax authorities. For three years before the exemption was withdrawn, BCCI was granted a total tax exemption of Rs 215 crore.