After months of communication, the Income Tax (I-T) department has got substantial information from the United Kingdom and Mauritius regarding overseas accounts of “non-residents” who invested in the cash-rich Indian Premier League (IPL).
The department has also sent official requests to Switzerland and Ireland to share financial data.
The requests were sent after I-T investigations found links to investments in UK and Mauritius by a few IPL franchises, as also by suspended IPL Commissioner Lalit Modi, sources familiar with the development said.
Under the provisions of the Double Taxation Avoidance Agreement (DTAA), the information received from UK and Mauritius pertained to investments made in these countries and routing of funds in IPL teams, sources said.
The data will enable I-T authorities to tax funds in India and will be a part of the probe report being prepared by the department. It was looking forward for the information since June last year, they said.
The department will compile the data received from the two countries in “confidential” compact discs (CDs) and will dispatch them to I-T ranges concerned with investigation and subsequent attachment of proof for raising tax demands.
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The I-T investigating unit in Mumbai had earlier written to the foreign tax division in the Central Board of Direct Taxes (CBDT) to obtain information regarding “foreign entities in IPL teams”, after its probe into the cash-rich tournament found investments by “non-residents”, especially in a few IPL teams.
In order to establish the magnitude of tax evasion, the department had also approached CBDT to execute DTAA with countries such as Switzerland, Germany and Mauritius for obtaining information on finances under the tax information exchange treaty.
The foreign tax division in the finance ministry looks into tax liabilities and evasion by non-residents and foreigners, with respect to both the countries.
The department was also contemplating questioning Modi through video conferencing, as suggested by the law ministry, sources said.