Nation Current Affairs 31 Jul 2019 Income Tax departmen ...

Income Tax department in denial mode: We only acted as per the law

DECCAN CHRONICLE.
Published Jul 31, 2019, 3:44 am IST
Updated Jul 31, 2019, 4:04 am IST
Siddhartha admitted to unaccounted income of Rs 362.11 crores and Rs 118.02 crores.
Relatives throng  SM Krishna’s house in Bengaluru
 Relatives throng SM Krishna’s house in Bengaluru

BENGALURU: The Office of Chief Commissioner of Income –Tax, Karnataka & Goa has clarified that the authenticity of the note left by former foreign  minister S M Krishna’s son in law and entrepreneur V G Siddhartha’s signature as available in his annual reports cannot be verified and the signature does not tally with Mr. Siddhartha's signature from earlier documents.

In a formal statement, issued by the Income Tax department following the note said to be left by Siddhartha that blames the IT dept for the attachment of Coffee Day shares by the Income Tax department, the Income Tax Department issued a point by point rebuttal, listing the action taken against the Café Coffee Day founder, stating that “The income Tax department has acted as per the provisions of Income Tax Act."   

 

"The investigation in the case of Siddhartha and Café Coffee Day arose from the search in the case of a prominent political leader of Karnataka. It is based on the unearthing of a credible evidence of financial transactions done by the Café Coffee Day in a concealed manner", the note said.

It said the trigger for the IT investigation came after "a person holding citizenship of Singapore, who was also covered in search operation,  was found with unaccounted cash of Rs 1.2 crores and who, admitted that the cash belonged to Siddhartha."

"In the search operation, after considering the evidences gathered by the department, Siddhartha admitted the unaccounted income of Rs 362.11 crores and Rs 118.02 crores, in the hands of Siddhartha and M/S Coffee Day Enterprises Ltd did not offer the admitted income in its part", the note read.

Siddhartha, subsequently filed the return of income but did not offer the above undisclosed income as admitted in the sworn statement in both the cases except sum of around Rs 35 crores in his individual case.

Further one of the group companies M/s Coffee Day Global Ltd has not paid Self Assessment Tax of Rs 14.5 crores on the returned income. M/s Coffee Day Enterprises Ltd did not offer the admitted income in its part.

 The IT department also states that on Jan 21, this year's major newspapers carried reports that Siddhartha is planning to sell the equity shares of Mindtree Ltd held by him and his company immediately. Based on the report, an immediate verification of the facts were carried out. It was found that the assessees Siddhartha, M/s Coffee Day Enterprises Ltd and M/s Coffee Day Trading Ltd together held nearly 21 % of shareholding in Mindtree Ltd. It was also gathered that the deal for sale of shares are set to be finalized in Jan 2019.

The tax effect along with interest and penalty based on the provisional attachment of 74,90,000 shares of Mindtree Limited under section 281B of Income Tax Act was made. This action is a normal requirement to protect the interests of the revenue.  Subsequently Siddhartha filed a request letter to release Mindtree shares and in return offered other other scurity of shares of M/s Coffee Day Enterprises Ltd against the expected demand. This was accepted and the attachment of Mindtree shares were revoked on Feb 13, 2019 with specific condition that the sale proceeds will be utilized only for  repayment of loans availed against the Mindtree Ltd shares by opening escrow account and the remaining balance will be provided for attachment under section 281B against the tax liability to arise.  

The alternate attachment of 46,01,869 unencumbered shares and 2,04,43,055 encumbered shares of M/s Coffee Day under section 281B was also made on Feb 13 and 14 of 2019, the note added.

The assesses had transferred the Mindtree Ltd shares to M/s L&T Infotech Ltd on Apr 28, 2019 and received around Rs 3,200 crores. Out of this consideration, the assessee had repaid loan of around Rs 3,000 crores and paid expenses related to thereafter of Rs 154 crores. The balance of Rs 46 crores was paid towards first instalment of Advance Tax of estimated MAT liability of around Rs 300 crores in the case of shares of Coffee Day. As against the balance MAT liability approximately Rs 400 crores, the provisional attachment made by the department is less than 40% of the likely tax liability.

The provisional attachment was made to protect the interests of revenue out of the income admitted by assessee based on credible evidence gather in search action.

The income Tax department has acted as per the provisions of Income Tax Act, the note concluded.  

The press note was issued by the office of Income Tax Officer, Head Quarters, Public Relations for Principal Chief Commissioner of Income Tax, Karnataka & Goa.

...
Location: India, Karnataka, Bengaluru




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