I-T sleuths probe NRI funds in IPL

The IT department has requested the Finance Ministry to try and get details of overseas accounts of 'non-residents' who invested in the IPL.

updated: June 06, 2010 08:31 IST
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Mumbai/New Delhi:

The Income Tax department has requested the Finance Ministry to approach the authorities in Switzerland and other tax havens for details of overseas accounts of "non-residents" who invested in the Indian Premier League.

The step is part of the ongoing investigations into investment of foreign funds in the IPL.

The investigating unit in Mumbai has written to the Foreign Tax Division in the Central Board of Direct Taxes (CBDT) to obtain information about "foreign entities in IPL teams" after its probe into the cash-rich tournament found investments by "non-residents" especially in teams like Kings XI Punjab, Rajasthan Royals and Royal Challengers Bangalore.

The Ministry has also written to the Reserve Bank of India (RBI) seeking information on the foreign investments brought by all the IPL franchises and have asked the Enforcement Directorate to check violations under the Foreign Exchange Management Act (FEMA).

"The bid documents reveal huge funding by NRIs in various IPL franchises. But the documents do not reflect the entire financial details of these individuals," a top I-T officer said.

In order to establish the amount of tax evasion, if any, the department has approached the concerned CBDT wing to execute Direct Taxation Avoidance Agreements (DTAA) with countries such as Switzerland, Germany and Mauritius to facilitate exchange information, the officer added.

The Foreign Tax Division in the Finance Ministry looks into the tax liabilities and evasion by non-residents and foreigners in respect of both the countries under the agreements.

The overseas remittances of certain IPL franchises are also under probe, I-T sources said.

The Income Tax department had collected documents related to bidding, payment of taxes and various other financial details during its countrywide survey of various IPL franchises, with the first such operation being conducted on April 15 at the BCCI and IPL premises, including the office of suspended IPL Commissioner Lalit Modi.

The I-T department in Mumbai has created a special cell of officers to monitor the IPL as the metropolis hosts the IPL marketing and advertising offices.

Almost eight investigation wings of the department in various cities like Chandigarh, Kochi, Jaipur and New Delhi are also probing the taxation aspects of the IPL transactions.