The income and profits shown by various BBC group entities are not commensurate with the scale of their operations in India, according to an official statement on Friday, a day after the Income Tax authorities ended a three-day-long survey against the British media organisation.
The Central Board of Direct Taxes (CBDT) issued a statement without naming the media organisation and said that I-T teams unearthed crucial evidence by way of statement of employees, digital proof and documents. Officials said the statement pertains to the British Broadcasting Corporation (BBC).
According to the statement, the Department gathered several evidences pertaining to the operation of the organization 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." The survey was launched on February 14 at BBC offices in Delhi and Mumbai and it ended after about 60 hours on Thursday night.
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"The survey operations also revealed that 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 subiect to withholding tax which has not been done. Further, the survey has also thrown up several discrepancies and inconsistencies with regard to Transfer Pricing documentation," the statement added. These discrepancies are related to level of relevant Function, Asset and Risk (FAR) analysis, incorrect use of comparable which are applicable to determine the correct Arms Length Price (ALP) and inadequate revenue apportionment, among others, it stated.
The CBDT also noted that while they 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."
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The broadcaster had earlier released a press statement saying that, "We are supporting staff - some of whom have faced lengthy questioning or been required to stay overnight - and their welfare is our priority. Our output is back to normal and we remain committed to serving our audiences in India and abroad."
According to sources from the BBC, the situation was described as "stressful and disruptive" for their staff. Meanwhile, officials in New Delhi stated that the I-T surveys were being carried out to investigate concerns related to the international taxation and transfer pricing of BBC's subsidiary companies.
(With inputs from PTI)
