About two months after a criminal case was filed by Reebok India against two of its former employees over a scam allegedly involving Rs 870 crore (Rs 8.7 billion), the Income Tax department has found it might not be a case of corporate fraud as made out and could involve tax evasion to the tune of Rs 140 crore (Rs 1.4 billion).

The department, in its probe till now, has found that there did not exist signs of a clandestine 'corporate layering' or veiled laundering in the finances of the company but the case qualifies under the category of manipulation and misrepresentation of 'discounts'

offered by the firm to its dealers and manipulation of books of accounts, sources said.

The I-T department is now checking the account books and financial documents of select Reebok dealers in India, to whom it is issuing notices.

The case, where the FIR was filed in late May this year, is being probed by two other agencies, the Serious Fraud Investigations Office -- a department under the Corporate Affairs Ministry and the Economic Offences Wing of the Gurgaon police.

In the complaint filed at EOW, Reebok India had alleged its former managing director Subhinder Singh Prem and COO Vishnu Bhagat were involved in a Rs 870-crore fraud by indulging in 'criminal conspiracy' and 'fraudulent' practises.