{"id":7658,"date":"2016-08-03T15:35:30","date_gmt":"2016-08-03T10:05:30","guid":{"rendered":"http:\/\/www.itatonline.org\/info\/?p=7658"},"modified":"2016-08-03T15:42:58","modified_gmt":"2016-08-03T10:12:58","slug":"tax-dept-hauls-up-ndtv-for-alleged-bogus-sale-of-dreams-of-rs-642-cr-in-alleged-complicity-with-pwc","status":"publish","type":"post","link":"https:\/\/itatonline.org\/info\/tax-dept-hauls-up-ndtv-for-alleged-bogus-sale-of-dreams-of-rs-642-cr-in-alleged-complicity-with-pwc\/","title":{"rendered":"Tax Dept Hauls Up NDTV For Alleged Bogus \u201cSale Of Dreams\u201d Of Rs. 642 Cr In Alleged Complicity With PWC"},"content":{"rendered":"

The Income-tax Department (see embedded order at bottom of post<\/em>) has made an addition of Rs. 642 crore on New Delhi Television Ltd (NDTV) in respect of AY 2009-10. It is claimed that a sum of Rs. 624 crore (US$ 150M) was received by a subsidiary of NDTV for allotting shares to NBC Universal Inc and Universal Studios International BV. It is claimed that the shares were allotted at Rs. 7,015 each even though the allotting companies had no business activities. It is also claimed that there was no independent valuation conducted of the shares. It is also claimed that in the immediately succeeding AY 2010-11, NDTV BV bought the shares at Rs. 634 per share, creating a loss of Rs. 584 crore for USBV. <\/p>\n

\"How_USBV_invested_into_NDTV\"
\n(Source & image Credit: pgurus.com<\/a>)<\/em><\/p>\n

The AO has alleged that the transaction is a sham and is designed to route the assessee\u2019s undisclosed money through its subsidiary. This finding has been upheld by the DRP and a sum of Rs. 642 crore has been directed to be assessed as the assessee\u2019s undisclosed income u\/s 69A of the Act. <\/p>\n

NDTV, in its defense, appears to have justified the valuation on the basis that it \u201csold a dream<\/em>\u201d to the investor and that the \u201cdream went bust<\/em>\u201d. However, the argument has been rejected by the AO and the DRP on the ground that there is no credible evidence of having \u201csold the dream<\/em>\u201d or of the \u201cdream having gone bust<\/em>\u201d. <\/p>\n

The AO has also issued a notice u\/s 271(1)(c) of the Act for levying penalty of Rs. 436 crore being 200% of the tax sought to be evaded on the addition of Rs. 642 crore. <\/p>\n

Alleged complicity by PWC in the alleged scam<\/strong>: <\/p>\n

In the s. 271(1)(c) notice, the AO has alleged that there was complicity by PriceWaterhouse, the leading MNC firm of Chartered Accountants. Certain emails from one Mr. Vivek Mehra of PWC are quoted in which he has offered advice to NDTV that \u201cWe must not mention that NDTV is receiving the 150m as dividend or otherwise<\/em>\u201d. It is also stated \u201cIf asked a question what will the money be used for ??? We need to decide how to answer this question carefully<\/em>\u201d. <\/p>\n

The AO has alleged that \u201cThe mail dated 21.05.2008 written by Mr. Vivek Mehra (PWC) to Dr. Prannoy Roy is an unambiguous advice to Dr. Roy to conceal the true import of the transaction and not to mention that NDTV was receiving the 150 million as dividend or otherwise<\/em>\u201d. He also quotes from another email from PWC which cautions Dr. Prannoy Roy that the \u201cproblem could become worse if we give a handle to the tax authorities<\/em>\u201d. <\/p>\n

There is also an earlier allegation asking \u201cIs NDTV muzzling an honest officer who caught their Tax Fraud?<\/a><\/em>\u201d It is alleged by S. Gurumurthy, a well-known Chartered Accountant and political activist that \u201cTwo lady officials of IT Dept became proxies for NDTV and PC. They charged Sanjay Srivastava with sexual harassment<\/em>\u201d. <\/p>\n

\n

Fro archives of @OpIndia_com<\/a>: Is NDTV muzzling an honest officer who caught their Tax Fraud? https:\/\/t.co\/GTn3QZRJfs<\/a><\/p>\n

— Rahul Raj (@bhak_sala) August 2, 2016<\/a><\/p><\/blockquote>\n