The income tax department on Friday issued a statement claiming that the income or the profit shown by the BBC is not commensurate with the scale of operations. The statement comes after the ‘survey’ by the department amid a row over BBC’s documentary on Gujarat riots concluded on Thursday night after over 58 hours. In a statement, the department said the survey revealed that despite substantial consumption of content in various Indian languages (apart from English), the income shown is not in proportion with the operations.
“During the course of the survey, 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 income tax department said.
Citing other findings of the 3-day survey at BBC’s Delhi and Mumbai offices during which the income tax officials stayed at the offices overnight to question the employees , the department said 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,” the statement said.
“Further, the survey has also thrown up several discrepancies and inconsistencies with regard to Transfer Pricing documentation. Such discrepancies relate to level of relevant Function, Asset and Risk (FAR) analysis, incorrect use of comparables which are applicable to determine the correct Arms Length Price (ALP) and inadequate revenue apportionment, among others,” it said.
