The IPL Controversy

The NDTV news channel reports said that the department of Income Tax has raided the offices two agencies - World Sports Group and Multi Screen Media (MSM) (formerly Sony Entertainment Television India) early Wednesday in Mumbai in connection with the Indian Premier League (IPL) investigation. The two companies handle the broadcast rights of the IPL. A team of over 50 officials of the Directorate of Income Tax Investigation started the operations on the premises. The Income Tax department had first started with the Kochi franchise of IPL last Wednesday. Next Day, the officials from the income tax department visited the various offices of the IPL in Mumbai and questioned its commissioner Lalit Modi. (IPL Commissioner and Chairman).The I-T department has collected data on the bidding process, shareholders agreements, expenditures incurred on tournaments and income generated by not just the Board of Control for Cricket in India but also the franchisees. The initial investigation says that there is unexplained investments, loans, advances or equity (under the Section 69B and C of the Income Tax Act,) passed through complex corporate structures, located in foreign countries in many cases, was not recorded in the books. The main concern was whether ill-gotten money stashed abroad was being brought back into the country, as also whether there was tax evasion by IPL and its franchises. The 10 franchises under investigation are Kochi's Rendezvous Sports, Pune's Sahara group, Mumbai Indians, Delhi Daredevils, Kolkata Knight Riders, Royal Challengers Bangalore, Deccan Chargers, Chennai Super Kings, Rajasthan Royals and Kings XI Punjab.The I-T department is also trying to look into the accounts of IPL, especially the deals IPL has struck with other entities. The question is why the Government has not made any assessment of the incomes of the IPL teams, and taxes payable by existing IPL teams during the last three Assessment years?