The “survey” action carried out at the business premises of the British Broadcasting Corporation (BBC) in Delhi and Mumbai over the last three days revealed that despite substantial consumption of content in various Indian languages (apart from English), the income shown by various group entities is not commensurate with the scale of operations in India, the Finance Ministry said on Friday.
”During the course of the survey, the (Income Tax) Department gathered several (pieces of) evidence pertaining to the operation of the organisation 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 ministry said without directly naming the BBC.
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. Such discrepancies relate to the level of relevant Function, Asset and Risk (FAR) analysis, incorrect use of comparables that are applicable to determine the correct Arms Length Price (ALP) and inadequate revenue apportionment, among others, the ministry said.
The survey operation has resulted in the unearthing of crucial evidence by way of statements of employees, digital pieces of evidence and documents which will be further examined in due course. It is pertinent to state 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 Department exercised due care to record statements of only key personnel, it was observed that dilatory tactics were employed including in the context of producing documents/agreements sought. Despite such a stance of the group, the survey operation was conducted in a manner to facilitate continued regular media/channel activity.