‘BBC indulging in dilatory tactics to delay investigation’: IT department after 'survey’ at BBC offices

Mumbai: Income Tax officials have alleged that the management of the British Broadcasting Corporation (BBC) are indulging in  “dilatory tactics” to delay investigation. However, the BBC did not respond to the allegation. 

The IT department alleged that BBC did not produce documents and copies of agreements sought by it  during the survey at the broadcaster's offices in Mumbai and Delhi. 

The tax officials claimed to have uncovered irregularities in the accounting books of BBC following a three-day survey which  ended on Thursday night.

“The survey has revealed that despite substantial consumption of content in various Indian languages apart from English, the income and profits shown by various group entities is not commensurate with the scale of operations in India,” said a statement issued by IT Department.

Tax not paid on certain remittances

Taxman gathered several pieces of evidence pertaining to the operation of the organization during the survey which indicated that tax has not been paid on certain remittances and not disclosed as income in India by the foreign entities of the group. 

The findings have "thrown up several discrepancies and inconsistencies with regard to transfer pricing documentation," IT officials claimed referring to the practises when one arm of a multinational corporation pays another for goods, services or intellectual property.

Discrepancies, inconsistencies with regard to Transfer Pricing documentation

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 subject 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 IT department insisted that BBC had been served with notices in the past but it remained 'defiant and non-compliant' and had significantly diverted its profits.