Survey at BBC: India’s tax officials found 'discrepancies'

India's income tax authorities today said it has found "several discrepancies and inconsistencies with regard to transfer pricing documentation" during the three-day "survey" against the BBC.

The income and profits shown by various BBC group entities are not commensurate with the scale of operations in India, the Central Board of Direct Taxes (CBDT) said in a statement in New Delhi a day after officials wrapped up a nearly 60-hour "survey of the broadcaster's office in Delhi and Mumbai, reports our New Delhi correspondent.

The CBDT said its income tax teams during the survey have "unearthed crucial evidence by way of statement of employees, digital proof and documents".

"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 statement said its survey revealed that despite substantial consumption of content in various Indian languages (apart from English), the income shown is not in proportion with the operations.

"Further, the survey has also thrown up several discrepancies and inconsistencies with regard to transfer pricing documentation. Such discrepancies relate to level of relevant function, asset, and risk (FAR) analysis, incorrect use of comparables which are applicable to determine the correct arms length price (ALP) and inadequate revenue apportionment, among others," it said.

The income tax survey came weeks after the BBC aired a documentary in January on the riots in Gujarat in 2002 when Narendra Modi was its chief minister. It set off a political slugfest between ruling BJP which accused the BBC of "anti-India" posture and the opposition parties which questioned the income tax action against the India unit of Britain's public broadcaster.