I-T dept slaps MMRDA, CIDCO with Rs 2,800 crore notice
Officials of the state controlled bodies Mumbai Metropolitan Region Development Authority (MMRDA) and the City Industrial & Development Corporation (CIDCO) are reeling with shock, after being slapped with tax notices to the tune of Rs 2,800 crore
Officials of the state controlled bodies Mumbai Metropolitan Region Development Authority (MMRDA) and the City Industrial & Development Corporation (CIDCO) are reeling with shock, after being slapped with tax notices to the tune of Rs 2,800 crore.
While the MMRDA has been asked to cough up Rs 2,400 crore, CIDCO has been asked to pay Rs 400 crore by the income tax (I-T) department, said sources from the government.
Sources hinted that the stupendous funds generated by the MMRDA through the sale of prime land in the city could have been the basis of the I-T notice issued to the development body. CIDCO too has raked in large revenues through the sale of land and housing units in Navi Mumbai.
The MMRDA recently sold 92 hectares of land, large chunks of which are on the E and G blocks of the upscale Bandra Kurla Complex (BKC).
Both MMRDA and CIDCO have also earned crores through the sale of floor space index (FSI).
The decision to hike FSI from 2 to 4 at BKC alone helped the MMRDA to earn an additional Rs 2,000 per square feet, said a government official.
The notice has raised eyebrows among the upper echelons of the MMRDA, who claim that the government has, at various occasions in the past, relied on the cash-rich development body to rescue many of its ailing enterprises.
Sources revealed that the government is yet to return a whopping sum of Rs 1,700 crore to the body.
When contacted, TC Benjamin, principal secretary of the state Urban Development department said, "We have decided to challenge both the notices. CIDCO's appeal will be heard on September 16 before the IT Tribunal."
He added the notices were unfair, considering both bodies were government enterprises, which were being run for public interest. Moreover, the cited funds were capital gains and not net profits.
The sum of money the government owes MMRDA according to sources