I-T dept says CCD's Siddhartha accepted holding blackmoney, disputes his signature on letter
New Delhi/Bengaluru, Jul 30: The Income Tax Department on Tuesday denied charges of harassment during its probe against Caf 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.
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.
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 department has acted as per provisions of the Income Tax Act," it said.
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.
The raids against the group were carried out as a result of a similar action against a prominent Karnataka politician and Siddhartha, in a sworn statement, "admitted" unaccounted income of Rs 362.11 crore and Rs 118.02 crore in his hands and that of Coffee Day Enterprises Ltd respectively, it said.
A Singaporean citizen was searched in this case and he was found with unaccounted cash of Rs 1.2 crore and the person told tax officials that it belonged to Siddhartha, the department claimed.
It alleged that the CCD promoter filed his IT returns but "did not" mention the undisclosed income, as admitted in the sworn statement, in both the cases except an amount of around Rs 35 crore in his individual case.
"Even on this admitted sum, Coffee DAY Global Ltd has not paid the self-assessment tax of Rs 14.5 crore on the returned income. Coffee Day Enterprises Ltd did not offer the admitted income in its part," it said.
It said the department got to know through media reports in January that Siddhartha was planning to sell the equity shares of Mindtree Ltd, held by him and his company, on an immediate basis.
Tax officials found that Siddhartha and Coffee Day Enterprises Ltd together held nearly 21 per cent of shareholding in Mindtree Ltd and that the deal for sale of shares was set to be finalised within that month.
As the tax revenue ramification in this case was worth crores and the assessee had not taken permission from the I-T authorities for selling these shares, they were attached as per the norm, it said.
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.
It 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.
"The alternate attachment of 46,01,869 unencumbered shares and 2,04,43,055 encumbered shares of Coffee Day Enterprises Ltd was made on February 13-14," the department said.
The CCD promoter is the son-in-law of former Karnataka chief minister and BJP leader S M Krishna and was last seen near a bridge on Netravati river in Kotepura area in Dakshina Kannada district on Monday night.
Authorities have launched a massive search for him.
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PM arrives in Kolkata to unveil projects, address rally in Bengal''s Nadia
Kolkata (PTI): Prime Minister Narendra Modi arrived here on Saturday for a visit to West Bengal's Nadia district, where he is scheduled to inaugurate national highway projects and address a public rally, amid heightened political tensions over the ongoing SIR exercise in the state.
This is Modi’s first visit to the state since the draft SIR rolls were published, and the third in the past five months.
"The PM arrived at the N S C Bose International Airport at 10:33 am and boarded a helicopter for Nadia," an official said.
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The Prime Minister, political observers said, is scheduled to address the growing unease amongst the Matua community members post the publication of the draft rolls from his strategically located BJP rally venue in Taherpur area of Ranaghat, not far from the heartland of the Namasudra Hindu community in adjacent Bongaon.
In the process, Modi is likely to sound the BJP’s bugle for the assembly polls, which are due in the state early next year and finalise the roadmap for the party’s big push for the crucial elections.
“The people of West Bengal are benefiting from numerous pro-people initiatives of the central government. At the same time, they are suffering due to the TMC’s misgovernance in every sector,” the PM posted on X on Friday evening while announcing his visit.
“The loot and intimidation of the TMC have crossed all limits. That is why, the BJP is the people’s hope,” he added.
The PM’s visit comes at a time when the Mamata Banerjee-led Trinamool Congress has mounted sustained opposition to the Special Intensive Revision (SIR) of electoral rolls, alleging that the exercise is being carried out in “haste” and that a large number of genuine voters, particularly refugee Hindus, risk disenfranchisement on its account.
In the draft electoral rolls published after the enumeration phase, 58,20,899 names have been excluded, reducing the electorate to 7.08 crore.
Around 1.36 crore entries have also been flagged for "logical discrepancies", while 30 lakh voters have been categorised as unmapped – a significant percentage of whom are likely to be called for verification hearings over the next 45 days.
For Matuas, a Dalit Hindu community that migrated from Bangladesh over decades due to religious persecution, this exercise has revived anxieties over identity and documentation.
Political observers widely believe that the community members hold sway in as many as 80 of the 294 assembly seats in the state.
Speculations are rife that significant numbers of Matuas have already been excluded from draft rolls. Many more are likely to follow suit in the final rolls on account of the unavailability of the EC-specified indicative documents they need to produce in the eventuality of receiving hearing notices during the verification phase.
Over the past years, poll results have indicated that the BJP gained significant inroads within the community, promising them formal Indian citizenship.
BJP MP Jagannath Sarkar, who represents the Ranaghat Lok Sabha seat, where Taherpur is located, claimed that fear was being spread deliberately among the Matuas about SIR.
"We are hopeful that the PM's message would dispel those fears and canards," he said.
Chief Minister Mamata Banerjee has already led anti-SIR rallies in Nadia and North 24 Parganas, the two adjoining districts that share a border with Bangladesh and have a significant Matua presence.
During his visit, the PM will inaugurate and lay the foundation stone for two national highway projects worth around Rs 3,200 crore.
He will inaugurate the 66.7-km-long four-laning of the Barajaguli-Krishnanagar section of NH-34 in Nadia district and lay the foundation stone for the four-laning of the 17.6-km-long Barasat–Barajaguli section in North 24 Parganas district.
The projects are expected to serve as a vital connecting link between Kolkata and Siliguri, boosting trade, tourism and economic activity across southern and northern parts of the state, officials said.
