The mention of ‘harassment’ by the income-tax department in the letter purportedly written by late Cafe Coffee Day promoter VG Siddhartha has brought forth the continued irrational aggressiveness by the Indian taxmen despite assurance by the top functionaries of the government that tax regime would be non-intrusive and taxpayer-friendly.
But, the Income Tax Department on Tuesday denied charges of harassment during its probe against Café Coffee Day (CCD) promoter V G Siddhartha as it pointed out that his signature available with it was different from that on a letter being widely published on social media. It said the businessman had admitted holding stash income after raids were conducted against him and his concerns.
Here's a chronology of events of VG Siddhartha's suicidal death:
The 58-year-old businessman is the son-in-law of former Karnataka Chief Minister SM Krishna and has been missing since last evening from Mangaluru.
Siddhartha was spotted last Monday evening at the Netravati Bridge where he had gone for a stroll.
A massive search operation involving multiple teams of police forces along with the Coast Guard and NDRF was being carried out since Tuesday to locate Siddhartha.
V.G. Siddhartha's body was found in Karnataka's Netravathi river on Tuesday.
But, in the unverified letter, Siddhartha, who has gone missing on his way to Mangaluru from Bengaluru in Karnataka, said there was a lot of harassment from the previous DG of the Income Tax Department in the form of attaching "our shares on two separate occasions to block our Mindtree deal and then taking position of our Coffee Day shares, although revised returns have been filed by us (sic)".
"This was very unfair and has led to a serious liquidity crunch," the letter, bearing a purported signature of Siddhartha, said.
In the unverified letter, Siddhartha, who went missing on his way to Mangaluru from Bengaluru on Monday evening, said there was “a lot of harassment from the previous DG of the I-T department in the form of attaching our shares on two separate occasions to block our Mindtree deal and then taking position of our Coffee Day shares, although revised returns have been filed by us (sic). This was very unfair and has led to a serious liquidity crunch.”
VG Siddhartha was little upset regarding the "Income Tax torture", claimed his close associate and Sringeri MLA TD Rajegowda. "He was a close family friend of mine, for the last 40 years we have been close associates. Four-five days back he was little upset about the Income Tax torture. He also wanted to sell some of his properties to settle the debts as he had more assets than liabilities. Had he not been troubled, he would have survived," said Rajegowda.
Refuting the charges, the department said in a statement issued in Bengaluru that the provisional attachment of shares was made by the department to protect the "interests of revenue", a norm in cases of large tax evasion, and the action was based on "credible evidence" gathered in the search action that was undertaken against the Bengaluru-based group in 2017.
The authenticity of the note circulating on social media cannot be vouched for as Siddhartha's signature "does not tally" with what is available with the department in the form of annual reports of the company, it said.
The statement said Siddhartha fetched Rs 3,200 crore from the sale of Mindtree shares, but has paid only Rs 46 crore out of the total Rs 300 crore minimum alternate tax (MAT) payable on the deal.
"As against the balance MAT liability of Rs 250 crore and tax liability based on search findings to the tune of about Rs 400 crore, the attachment made by the department is less than 40 per cent of the likely tax liability," it said.
Further, the department said the provisional attachment of shares was to protect the “interests of revenue” and the action was based on “credible evidence” gathered in the search or raid action that was undertaken against the Bengaluru-based group in 2017. It added that the department has acted as per provisions of the Income-Tax Act.
The department further said that Siddhartha fetched Rs 3,200 crore from the sale of Mindtree shares, but has paid only Rs 46 crore out of the total Rs 300-crore minimum alternate tax (MAT) payable on the deal. The department added it recovered numerous messages from his mobile phone that indicated his “active involvement in cross-border hawala transactions”.
The department said it got to know through media reports in January this year that Siddhartha was planning to sell the equity shares of Mindtree, held by him and his company, on an immediate basis.
Mindtree Ltd's 74,90,000 shares were attached and such an action is a normal requirement to protect the interests of revenue in big cases of tax evasion, the department said.
The department said Siddhartha then filed a request to release these shares and offered other shares of Coffee Day Enterprises Ltd as security against the expected demand.
The department accepted this request and the attachment of Mindtree shares was revoked on February 13, it said. However, a specific condition was put by the department that the sale proceeds will be utilised only for repayment of loans availed against the Mindtree Ltd shares by opening escrow account and the remaining balance will be provided for attachment to the department against the tax liability to arise.
