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SPORTS: CRICKET
Board Of No Control
An Income-Tax Department report accuses the Indian
Cricket Board of spending more of its millions on meetings than on matches
By Sharda Ugra
 For
the Board of Control for Cricket in India (BCCI) trouble now comes, like
it does from a loaded deck of cards, in spades. Just when it thought it
safe to lift its head after being mauled by match-fixing, the BCCI ran
up against the Government's policy on playing Pakistan and tried to bluff
its way out of that one by threatening not to play in the World Cup. Even
as it recovered from a ministerial rebuke, a preliminary assessment report
from the Income-Tax Department in Mumbai, citing instances of lavish spending
by officials, was unearthed.
The most glaring examples of extravagance, according
to the income-tax report, took place when:
- Jagmohan Dalmiya was given $5,000 (around
Rs 2 lakh) towards entertainment expenses. The report does not specify
the year this sum was handed out but indications point to 1997 when
Dalmiya launched a campaign to be elected president of the International
Cricket Council (ICC).
- Former board chief Raj Singh Dungarpur was
given $350 (around Rs 15,000) per day for 45 days and an entertainment
allowance of $3,000 for an ICC meeting which was scheduled for one week.
- P.M. Rungta was paid Rs 89,800 and Rs 1,58,865
for expenses incurred during Diwali to buy "dry fruits and liquor
for presentation to various officials and entertainment".
- Board Secretary J.Y. Lele ran up phone bills
of Rs 1,75,505 for his residential phone and Rs 35,737 on his cell.
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| JAYWANT LELE: According to the IT report,
the BCCI secretary had telephone bills totalling more than Rs 2.1
lakh |
JAGMOHAN DALMIYA: The IT report says
a $5,000 allowance was not accounted for and a bank statement was
not provided |
Former BCCI secretary Dalmiya also comes under
fire in another instance. The report asks for an explanation from the
board in regard to the bank statement of Indian Overseas Bank, Calcutta
(A/c No. 1223) which was opened in the name of indcom. On January 1, 1998
the name of the account was changed to World Cup 1998. The report further
states that, "the bank statement was called for with complete narration
of receipts and withdrawal from the said account to see the extent of
personal benefit enjoyed by Shri J. Dalmiya who operates the account.
However the assessee has failed to produce details called for".
There are also question marks on the amounts
paid to U.N. Banerjee, lawyer for Dalmiya and the board, which the BCCI
has categorised as legal charges. The report states that the Rs 47,900,
Rs 89,000, Rs 18,470, Rs 59,110 and Rs 13,729 were paid as travelling
charges and Rs 10,148 and Rs 10,190 for his accommodation. According to
the report, there were no details of the places travelled and the nature
of the work done.
The upshot of the report is that the it Department
has now sought to withdraw its tax exemption from the BCCI, given usually
to educational and sports bodies for conducting their noble works. According
to the report, the income of the BCCI should be treated as business income
and it recommends that the "maximum marginal rate" of tax, i.e.
35 per cent, be charged. On the BCCI's computed taxable income of Rs 21.29
crore, it works out to Rs 7.45 crore.
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| P.M. RUNGTA: The report says he was
given expenses of close to Rs 2.5 lakh for gifts to officials during
Diwali |
RAJ SINGH DUNGARPUR: The IT report
says the former board chief was given 45 days' allowance for a trip
that lasted a week |
Says Lele: "We are not going to pay and
will go into appeal against this report. So far we have been granted exemption.
What has suddenly changed?" Board Treasurer Kishore Rungta says the
merits of the case are sub-judice but explained the "factual situation"
to India Today: "What kind of money are we talking about in this
report? It is not even 0.1 per cent of the total revenue accrued to the
board." Rungta maintains the board's expenses have been scrutinised
by its internal committees. "There is nothing fishy about these expenses.
Some of the points in the report were in fact questions put up by our
own auditors for clarifications."
Former board president Dungarpur points out
that the instance cited in the income-tax report about his claiming allowance
for 45 days for "an ICC meeting which was for one week" is factually
incorrect. "This was during the 1999 World Cup where, as a member
of the ICC Executive Board, I attended more than one ICC meeting. I also
worked with the team's consultant and coach and travelled to the Indian
team's practice matches. All these expenses were ratified by the board."
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THE FINANCIAL BOUNCER
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| TAXMAN'S ATTACK |
BOARD'S REPLY |
| The Board of
Control for Cricket in India spends too much on meetings and too little
on cricket. |
The board says
administrative expenditure is only 2 per cent of total revenue. |
| It claims business-related
expenses, so must pay income tax. |
Expenses in conducting
domestic cricket and camps ignored by IT Department. |
| Officials claim
excessive travel allowances without giving any bills |
Allowances are
fixed by board rules, include all expenses and require no bills. |
But it cannot be denied that the board's fairly
generous allowances have kept the grapevine buzzing with tales of financial
misuse. The most popular one involves a former national selector claiming
air fare from his zonal cricket association's headquarters to the venues
of selection meetings long after he had moved residence from his zonal
home to a metro (where selection meetings were usually held) for professional
reasons.
Last year the board's spending also came under
fire due to a public-interest litigation (PIL) initiated by two Delhi
lawyers which said that the board spent only 2 per cent of its earnings
on coaching. The PIL, whose admissibility hearing comes up in the Delhi
High Court on May 23, dented the board's image and also provided the CBI
and the taxmen with leads that led last July to "Operation Gentlemen",
the highly-publicised tax raids on officials and players.
Rungta clarifies that the PIL had brought home
the realisation that by not categorising its expenses precisely, the board
could get into legal trouble. "We put the subsidies handed out to
state associations under the category of direct coaching expenses. Conducting
domestic tournaments alone amount to Rs 7-8 crore. Is that not a cricketing
expense? It is all a question of seeing the glass half-full or half-empty."
However, this is not a story of two halves. It is, if anything, a tale
of a cup of woe running over.
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