Income tax sleuths track money flow into betting syndicates

As 'spot-fixing' charges haunt Pakistani cricketers, Indian sleuths probing alleged tax evasion in the multi-million Indian Premier League (IPL) are now tracking trail of crores of rupees being pumped into betting syndicates in the country.

The income tax (I-T) department has now focused its country-wide IPL probe to unravel the routing of money to betting syndicates in India and abroad, thereby robbing the exchequer of taxes to the tune of crores of rupees.

The department is looking to frame a tax evasion case under section 155BB of the I-T Act which ensures tax to the government from -- winnings from lotteries, crossword puzzles, races including horse races, card games and other games of any sort or gambling or betting of any form or nature.

The department has sent a dossier to the RBI to ascertain monetary transactions and foreign investments in almost all IPL teams.

It has also found that a number of payments have been made by electronic transfer to various betting syndicates.

Sources said that IPL documents and the account books of various teams, in possession of the I-T department, are silent on these transactions.

"The I-T department, which is specifically looking after tax evasion in the T20 tournament, is concerned by the tax hidden from the income of betting," they said.

According to the sources, the betting information will be shared with other "empowered" agencies like the Enforcement Directorate (ED) and the police who can take up prosecution under various provisions of the Foreign Exchange Management Act (FEMA) and the IPC as the I-T Act does not allow the income tax authorities to take up prosecution in this case.

The I-T department has already 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 IPL.

The I-T 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 in some IPL teams.

The ministry has also written to the RBI seeking information on the foreign investments brought by all the IPL franchises and has asked the Enforcement Directorate to check violations under the FEMA.