Dubai-based Sunanda Pushkar may have given up her stake in the IPL Kochi franchise, but the taxman may not let her be. Senior income-tax officials in Mumbai said that Sunanda may be asked to pay roughly Rs24 crore in tax for the 19% sweat equity she held in Rendezvous Sports World, a member of the consortium that won the Kochi IPL franchise.
Since Rendezvous owns 25% of the franchise, Sunanda’s stake is valued at roughly Rs 74 crore, based on the consortium’s bid of over Rs1,500 crore.
According to I-T officials, Sunanda’s case is similar to that of Reliance Industries chairman Mukesh Ambani.
The case is currently being heard by the appellate tribunal of income-tax. In the Ambani case, the Mumbai circle of the income-tax department had issued a notice to him asking him to explain why he should not pay tax on deemed income from 500 million shares of Reliance Infocomm issued to him in March, 2004.
The shares were valued at Rs 2,685 crore from which the tax authorities had deducted a Rs50 crore interest-free loan given by Ambani to the company.
Ambani had claimed that the entire transaction mentioned in the IT notice was subsequently annulled and since no income had accrued to him, there could be no tax on the notional income.
“Sunanda’s case is, however, a bit different from Ambani’s. In newspaper stories she is reported to have claimed the sweat equity in Rendezvous as a gift in return for professional services to be provided in the future. A statement read out by her lawyer confirms that she earned this stake as part of her business venture. Now whether she continues to claim the equity as a ‘gift’ or as a stake that she invested in and subsequently returned, the fact remains that she has earned an income on the equity she held, and as in Ambani’s case, Sunanda is liable to pay tax,’’ said an I-T official.
Meanwhile, the department has given the Board of Control for Cricket of India (BCCI) a week’s time to submit the signed bid documents of the balance nine IPL franchisees.
The entire revenue structure of the IPL is under the taxman’s scanner. The department has issued a summons to the BCCI seeking details of the shareholding pattern of all the 10 franchises, as well as the player auction and bidding processes followed since the launch of the first edition of the league in 2008.
The Pune branch of the income-tax department has been further roped in to seek financial details of the Solapur-based Gaikwads who holds some 10% in the Kochi IPL consortium.
“We will question the stakeholders about their source of funding and income only after we have gone through the initial records,’’ said an official.