Thursday, May 17, 2007

CAG faults tax exemptions to Tendulkar, Gavaskar

New Delhi
May 14, 2007
Cricket stars Sachin Tendulkar and Sunil Gavaskar have come under the scanner of the Comptroller and Auditor General (CAG), who has found that they have been given a wrong benefit of income deduction as sportsmen which has resulted in a short levy of over Rs 4.42 crore in tax.
The assessments for the relevant years from 1998-99 to 2002-03, in case of Tendulkar, have been reopened.
The assessment for 2004-05 has been selected for scrutiny. The CAG report, which was tabled in the Parliament today, faulted the income tax department for giving incorrect allowance of deduction of income for both the stars for their earnings not from the game but from endorsements and commentating.
In Tendulkar's case, an audit scrutiny of assessment records revealed that aggregate deduction of Rs 8.89 crore was allowed on foreign currency remmitance received by him on account of sports endorsement-- advertisements and publicity activities.
As the income was not derived from his profession, the allowance of deduction was not in order. The CAG said the department's argument that the assessee had derived it in the capacity of artist was not acceptable as he had received it in the capacity of model which cannot be construed as an artist for this provision.

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