This post has been updated on October 1st to add additional data.
NDTV’s own statements of accounts show that they made a profit of Rs. 1107 crores ($250 million at an exchange rate of Rs. 41-42 to a dollar) by floating, money laundering, routing through tax havens and selling shares of its shell companies that were started abroad. The annual returns published by NDTV show that even after getting such huge profits the TV channel never paid tax for these huge profits. This admission of NDTV is now caught by the Income Tax Department (ITD) and the agencies’ findings are ratified by Delhi High Court’s Bench headed by Justice Ravindra Bhatt.
It must be remembered that during this period NDTV management was claiming a huge loss due to the Global meltdown and it retrenched more than 500 staffers across India.
The Judgment delivered by Delhi High Court’s Bench comprising Justice Ravindra Bhat and Justice Najmi Waziri on August 10 details the entire tax frauds committed by Prannoy Roy and the top management. The Judgment is published at the end of this article. Now NDTV’s appeal against this Judgment is in the Supreme Court and is expected to be headed by a Bench headed by Justice Rohinton Nariman on October 3. The NDTV wants a stay and quashing of Delhi HC Judgment exposing their tax evasion and money laundering through a series of illegal shell companies floated abroad.
The company passed off and adjusted exceptional gains as mentioned in the annual returns as operational profits and set them off in normal business operations to hide them from tax authorities. We all know that NDTV has never made any operational profits for over 10-12 years and thus evaded taxes on exceptional gains that should have been classified correctly in its tax returns. Moreover, as has been held by all bodies/ various levels of scrutiny, i. e. the Assessing Officer, Dispute Resolution Panel (DRP comprising of three Tax Commissioners), the ITAT and finally the Delhi HC judgment, these gains are taxable and thus NDTV by design has evaded taxes.
“NDTV’s annual report in 2008-09 clearly shows that they got “exceptional gain” of more than Rs.642 crores (Annexure 3, extract from Annual Report). Further, Annexure 4 also shows that NDTV made huge money through its shell companies in Mauritius. “The unutilized monies of NDTV Studios as at March 31, 2009, amounting to Rs.34,384 lacs (Rs.343.84 crore) have been kept with banks in deposit accounts. During the period NDTV Studios has earned Rs2,155 lacs (Rs. 21.55 crore) as interest on these deposits,” says Point No: 7 of the Annexure 4 Notes. Annexures below mention the Annual Report year and page number.” Further, diagrams/ charts below show how money was illegally routed via the Mauritius route of merging shell companies with companies in India.
It must be remembered that during this period NDTV management was claiming a huge loss due to the Global meltdown it retrenched more than 500 staffers across India. Will the Journalist unions that rallied for Prannoy Roy now have any answers for his treachery to the Journalist community? While earning huge profits, he richly rewarded his staffers by terminating 500 of them!
And finally from reading the Delhi High Court judgement of Justice Ravindra Bhat, it is crystal clear that NDTV management was conscious and by design carried out a tax fraud on GOI. The Delhi High Court Judgment exposing the tax frauds and money laundering of NDTV, and its own Annexure 3 and 4 showing huge gains and summary of its profits around Rs. 1107 crores earned by money laundering through its more than 30 illegal shell companies are published below:
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