Mumbai Cricket Association faces tax hearing

The Mumbai Cricket Association (MCA) faces a crucial hearing on May 3 over a tax demand of Rs 51.20 crores (around $9.7m) that if upheld would result in a severe shortage of funds with which to run the association. According to the MCA's own records, it has a total of Rs 46.35 crores in fixed deposits, of which Rs 15.35 crores has already been earmarked for various projects. At the same time, the association has outstanding liabilities of Rs 100.78 crores, including the tax demand, which means it would need to find a further Rs 70 crores to pay off its debts.

Ravi Savant, the MCA treasurer, confirmed the hearing to ESPNcricinfo but did not comment on the potential implications of losing the hearing.

In addition to the tax, the other major component of the outstanding liabilities is an amount of Rs 41 crores owed to Larsen & Toubro for the work they did on the renovation of the Wankhede Stadium prior to the 2011 World Cup. The cost of renovating the Wankhede Stadium eventually came to Rs 304.30 crores, though the initial estimate made in 2008 was reportedly just under Rs 100 crores. At its last management committee meeting on March 31, the MCA passed a resolution stating that no further payments would be made without the approval of its general body.

The MCA lost its tax exempt status in December 2010 with retrospective effect from December 2005. An association official said that one reason for the change in status was the building and operation of the MCA clubhouse in Bandra on a commercial basis. The tax demand of Rs 51.20 crores covers the period from 2006-07 to 2009-10. The MCA has estimated that a further tax demand of Rs 28.87 crores could be made for the financial years 2010-11 and 2011-12 and its tax consultant had recommended that they make a payment of Rs 25 to 30 lakhs to "show that the Association is keen on making payment to avoid attachment of the bank accounts".

In addition to its payments problem, the MCA is investigating how 405 tickets for the World Cup final went unsold. Vilasrao Deshmukh, the MCA president, has asked for a report on the issue that will be submitted to the members at the Annual General Meeting in June. The MCA's academy has also been virtually shut for the last nine months because of a lack of support staff.