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I-T dept apprehension on NDTV reasonable: HC

Author: TNN
Publication: The Times of India
Date: August 17, 2017
URL:   http://timesofindia.indiatimes.com/india/i-t-dept-apprehension-on-ndtv-reasonable-hc/articleshow/60094906.cms?from=mdr

The Income Tax department has "reasonable apprehension" that private channel NDTV may liquidate assets, the Delhi high court has observed.

In its judgment last week, the HC had upheld the I-T department's decision to start re-assessment proceedings against NDTV for the assessment years 2008-09 and 2009-10, holding that the authority had reasons to believe that some transactions of those years were "bogus".

In the verdict that became public on Wednesday, a bench of Justices S Ravindra Bhat and Najmi Waziri also refused to set aside the department's provisional attachment of the channel's immovable properties, non-current investments and tax refund, on the ground that the I-T department's apprehension that NDTV may liquidate its assets was "not unwarranted".

The court has dismissed NDTV's pleas against the reassessment proceedings and the provisional attachment order on August 10. Upholding the provisional attachment, the bench said, "this court is of the view that a reasonable apprehension that NDTV may liquidate the assets thwarting the recovery of tax liability is not unwarranted."

On the reassessment proceedings, the court said it was of the opinion that "the complex and circuitous structure of subsidiaries and the transactions entered therein are closely connected and provide a live link for the formation of the belief of the assessing officer (AO) that there has been escapement of income in assessment year 2009-10 and for the previous assessment year, 2008-09".

NDTV had argued that it had disclosed all transactions relevant for those assessment years (AYs) during the original assessment proceedings.

Rejecting this argument, the bench said there were several pronouncements which said that a disclosure of a transaction at the time of the original assessment does not protect the assessee from re-assessment if the AO has information that some of the transactions were bogus.

The court noted that in this particular case, the AO had reasons to believe that some of the investments made by NDTV in foreign subsidiaries during the financial years from 2007- 08 to 2011-12 and the amount of Rs 1,127 crore received from them by the media house were sham and bogus transactions. The AO had arrived at the opinion on the basis of tax evasion complaints allegedly moved by some shareholders of NDTV as well as the findings of the Dispute Resolution Panel, which had held that some transactions relevant for AY 2009-10 were bogus and sham and required lifting of the corporate veil, the HC said.

The AO had provisionally attached the channel's immovable properties, non-current investments and refund of Rs 19.88 crore due to NDTV for the AY 2008-0 9.
 
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