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I-T dept may withdraw benefits to CSE

BS Bureau

The Income Tax department has sought to cancel the benefits enjoyed by the Calcutta Stock Exchange as a non-profit organisation on the grounds that the bourse disbursed part of its accumulated surplus to meet the payment obligation of defaulting brokers.

The I-T department has demanded about Rs 35 million from the exchange as unpaid tax, but CSE has appealed against the move. The bourse administration feels the money was used in the normal course of business of the exchange and, on papers at least, the amount is to be repaid by the defaulting brokers.

The department initiated an inspection of the accounts of the exchange following the payment crisis, which surfaced towards the beginning of March.

As a non-profit organisation, the exchange is supposed to utilise its surplus over expenses in the interest of the public only, and not its members. It does not even pay dividend to its members. But, the utilisation of part of the exchange's general reserve is being seen by the I-T department as benefiting members only, and not the public. The bourse mortgaged fixed deposits of about Rs 250 million from its general reserve to clear the payout of settlement 2001150.

The cancellation of benefits as a non-profit organisation would mean an additional burden to the already cash-strapped CSE.

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