Irregularities detected on certain tax payments: Income Tax statement on 'survey' at BBC

Weeks after the BBC released a controversial series on Prime Minister Narendra Modi, the Income Tax departments conducted surveys on the media house's offices in Mumbai and Delhi.

Income Tax Department on Friday said it has uncovered irregularities in the accounting books of the British Broadcasting Corporation (BBC) following a three-day survey at its premises in Mumbai and Delhi.

"Survey action, under I-T Act, was carried out at business premises of group entities of a prominent int'l media company in Delhi and Mumbai. Despite substantial consumption of content, income/profits shown by various group entities not commensurate with scale of ops in India," read a statement from CBDT.

"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 subject to withholding tax which has not been done," the statement added.

"Survey thrown up discrepancies with regard to Transfer Pricing documentation. Such discrepancies relate to level of relevant Function, Asset and Risk analysis, incorrect use of comparables applicable to determine correct Arms Length Price and inadequate revenue apportionment," it further said.

The IT survey has revealed incorrect use of comparables which are applicable to determine the correct Arms Length Price (ALP) and inadequate revenue apportionment, among others.

The operation has resulted in unearthing of crucial evidences by way of statement of (BBC) employees, digital evidences and documents which will be further examined in due course.

It is pertinent 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 IT Department exercised due care to record statements of only key (BBC) personnel, it was observed that dilatory tactics were employed, including in the context of producing documents/agreements sought.

Despite such stance of the foreign media group (BBC), the IT survey operation was conducted in a manner so as to facilitate continued regular media, channel activity.

Weeks after the BBC released a controversial series on Prime Minister Narendra Modi, the Income Tax departments conducted surveys on the media house's offices in Mumbai and Delhi.

The Income Tax department's marathon "surveys" at BBC's offices ended on Thursday, after clocking over 58 hours in total, as officials prepared an inventory of financial data from select staffers and collected digital and paper data. The operation that began at the British Broadcasting Corporation (BBC) offices in Delhi and Mumbai around 11:30 am on Tuesday has ended in Mumbai and will be wound up at Delhi by tonight, sources said late on Thursday.

Tax authorities have made an inventory of the available stock, recorded the statement of some staffers and have impounded some documents as part of the survey action that continued for three days clocking about 57-58 hours, officials told PTI.

The survey was carried out to investigate issues related to international taxation and transfer pricing of BBC subsidiary companies, they had said.

Opposition parties have denounced the I-T department action against the London-headquartered public broadcaster, terming it "political vendetta".