Tax demand on Hasan Ali and associates pegged at Rs 71,845 crore

NEW DELHI: What exactly is the tax demand onHasan Ali Khan and his associates? For a while, a figure of Rs 40,000 crore has been doing the rounds, though some tax officials were questioning the veracity of this amount. However, the income-tax department is now learnt to have raised a demand of Rs 71,845 crore. 

This figure — which is larger than the country's health budget and its annual service tax collections — includes a demand of Rs 50,329 crore on Khan himself, Rs 49 crore on his wife, Rheema; Rs 591 crore on his alleged associate Kashi Nath Tapuriah and Rs 20,540 crore on his wife, Chandrika Tapuriah, revealed I-T department sources 

Of the total tax demand of Rs 71,845 crore, the I-T department has adjusted only Rs 60 lakh which was recovered from raids on Khan and the Tapuriahs. The appeal is now pending before theIncome Tax Appellate Tribunal. Even the Comptroller & Auditor General is learnt to be looking into the issue. 

Although investigations have been on since 2007, tax authorities were not really seen to be pushing the case till the Supreme Court turned up the heat. Interestingly, the Centre had filed an affidavit in the Supreme Court in 2009 itself stating that the I-T department had raised a demand of Rs 71,848.59 crore against Khan, his wife Rheema and other associates (reported by TOI in a front-page article, 'Pune man holds secret billions' on May 3, 2009). 

Government officials, however, said the recent demand was made following information collected by them from a pen drive and laptop recovered during raids on Hasan Ali and the Tapuriahs. They further said the scope of the probe has been widened to include at least six more countries, which may further push up the demand on Khan. The I-T department is investigating Khan's investment links in these countries. 

At nearly Rs 72,000 crore, the tax demand is nearly half the amount locked up in all tax disputes (direct and indirect), which were estimated at Rs 1.43 lakh crore at the end of March 2010 — not including the demand on Khan. 

The amount is more than what is being spent on food subsidy (Rs 60,000 crore), primary and secondary education (Rs 63,300 crore) or even the health ministry's budget (Rs 30,456 crore) in 2011-12. If the government manages to realize the amount from Khan and his associates, which officials admit is a remote possibility, it would be marginally higher than the Rs 69,400 crore that the government hopes to collect as service tax during the current financial year.

Source: http://timesofindia.indiatimes.com/india/Tax-demand-on-Hasan-Ali-and-associates-pegged-at-Rs-71845-crore/articleshow/7667407.cms

BSNL gave away valuable spectrum to 'shell companies'

NEW DELHI: State-run telecom firm BSNL bestowed favours on "shell companies" by allotting them wireless access (WiMAX) franchises; they, in turn, were more interested in selling their stake to "potential buyers" than in rolling out broadband network services. 

Communications minister Kapil Sibal has asked the telecom department to probe how Bharat Sanchar Nigam Limited (BSNL) handed out costly broadband wireless spectrum to select WiMAX franchises who did not meet eligibility criteria for technical experience. "It has been pointed out that cheap access has been provided to these shell companies to precious resources of BSNL, including costly broadband wireless access spectrum in metropolitan cities for which BSNL has already made massive upfront payments," Sibal said in his letter. 

Official sources said some of these firms had no track record — one dealt in auto parts. BSNL allowed tweaking of contract conditions post-bid to favour some franchises. Firms also "changed their technology partners after the bid". One firm dropped Cisco for Alvarion and similarly other companies also changed technology partners. 

DoT sources said the file on the controversial deals never reached the ministry. 

"I would like DoT in coordination with finance wing to scrutinize the entire exercise once again and suggest appropriate action latest by February 11, 2011," Sibal wrote to the telecom department. He noted that BSNL made "massive upfront payments" for WiMAX, a technology that allows speedy broadband services. But it provided "cheap access" to the shell companies. 

The penalty clauses for not complying with rollout obligations were weak - ranging between Rs 5 to 10 crore — while the spectrum was worth hundreds of crores. To date, none of the companies have shared any revenue with BSNL and no services have been provided. The firms were also allowed automatic renewal of contract and a one-year moratorium in payment after winning the bids.

Source:-http://timesofindia.indiatimes.com/india/BSNL-gave-away-valuable-spectrum-to-shell-companies/articleshow/7457393.cms