The probe into the Indian Premier League (IPL) is inching ahead.  After the Mauritius-based World Sports Group (WSG), which holds the IPL broadcast rights, the income-tax (I-T) department has asked Mauritius Colway Investment, a firm owned by Lalit Modi’s son-in-law Gaurav Burman, to submit the financial details and source of funding of its investments in Kings XI Punjab (KXIP). Burman owns 23% in the franchisee.

The information was sought as I-T officers did not find the details when they surveyed the Worli office of one of the KXIP stakeholders, Bombay Dyeing director Ness Wadia, on Friday. Wadia, too, owns 23% stake in the franchisee.

Colway is not the only stakeholder asked to furnish financial details. The department has asked eight franchisees, except the newly formed Pune and Kochi outfits, to submit financial statements and sources of funding.

I-T officers are aware that they are in for a long haul. “It will take at least a couple of months to complete this probe,” a senior investigator said. “A cursory glance will not do. The convoluted structures of the consortia, and the companies that form these consortia, will need a thorough scrutiny before we conclude who actually owns these teams.”

The taxmen said that they will be levying tax on the 5% transaction fee sought by the BCCI for transfer of shares by IPL franchisees Kings XI Punjab and Rajasthan Royals. Film star Shilpa Shetty and her husband, Raj Kundra, were sold 12.5% in Rajasthan Royals by original owners Emerging Media.

Emerging Media is a UK-based company owned by Manoj Badale, a friend of Modi.

Actress Preity Zinta, a current stakeholder in KXIP, did not hold a single share in 2008 in the consortium that bid successfully for the team, but has subsequently got some shares.

The move is significant as the department had been treating the BCCI, which owns the IPL, as a charitable organisation using revenues earned from cricket to promote the game. This year onwards, the BCCI may have to pay tax on IPL profits following an amendment in the Union budget, which stipulates that commercial ventures undertaken by charitable organisations are subject to tax.

The BCCI had been deducting tax at source (TDS) on earnings from the IPL ever since its inception three years ago. In the inaugural year itself, the board had paid over Rs100 crore as TDS.

More Under Income Tax

0 Comments

  1. JOJI says:

    Sir, I must repeat the same fable of the bolting the door after the horse has bolted from the stable! Thank you, the Sumitra Bannerjees of the Income tax deptt, Ketan Shahs of the MCI/medical profession, Madhri Guptas of the IFS and the like for their belated attainment of self!

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