IT Claims to have Found “Irregularities” in BBC Accountings
NEW DELHI, Feb 17: After the three-day “survey” of the BBC offices in Delhi and Mumbai, the Income Tax Department is claimed to have uncovered “irregularities” in its accounting books finding mismatch between its income and profit causing its scale of operations in India.
The Income Tax department had launched the “survey” within days of the British Broadcasting Corporation (BBC) airing a two-part documentary on the prime minister Narendra Modi and the 2002 Gujarat riots with critical analysis of his handling of the riots when he was the chief minister of his home state.
In a statement on Friday, the tax department alleged that income and profits disclosed by the BBC’s various units were “not commensurate with the scale of operations in India.” It said the department had gathered “several evidences (sic)” and was still in the process of going through statements of employees, digital files and documents.
Its findings “indicate that tax has not been paid on certain remittances which have not been disclosed as income in India by the foreign entities of the group”, the tax department claimed. “The survey has also thrown up several discrepancies and inconsistencies with regard to transfer pricing documentation,” it alleged, referring to the practises when one arm of a multinational corporation pays another for goods, services or intellectual property.
The I-T statement said, “The survey revealed that despite substantial consumption of content in various Indian languages (apart from English), the income/profits shown by various group entities is not commensurate with the scale of operations in India.”
“During the course of the survey, the department gathered several evidences pertaining to the operation of the organisation, which indicate that tax has not been paid on certain remittances, which have not been disclosed as income in India by the foreign entities of the group.”
“… Services of seconded employees have been utilised for which reimbursement has been made by the Indian entity to the foreign entity concerned. Such remittance was also liable to be subject to withholding tax, which has not been done… Survey has thrown up several discrepancies and inconsistencies with regard to transfer pricing documentation.”
“Survey operation has resulted in unearthing of crucial evidences by way of statement of employees, digital evidences and documents which will be further examined in due course. It is pertinent to state that statements of only those employees were recorded whose role was crucial including those connected to, primarily, finance, content development and other production related functions.” Even though the department exercised due care to record statements of only key personnel, it was observed that dilatory tactics were employed including in the context of producing documents/agreements sought. Despite such stance of the group, the survey operation was conducted in a manner so as to facilitate continued regular media/channel activity.”
The BBC is yet to respond to the charges.
(Manas Dasgupta)
