“The note written by Siddhartha mentioned about the attachment of Coffee day shares by the Income Tax department. The authenticity of the note is not known and the signature does not tally with Siddhartha’s signature as available in his annual reports,” the source told ET.
According to this source, the investigation in the case arose from the search in the case of a political leader of Karnataka. “It is based on the unearthing of a credible evidence of financial transactions done by the CCD in a concealed manner. A person holding citizenship of Singapore was also covered in the search action. He was found with unaccounted cash of Rs.1.2 crores and admitted that the cash belong to Siddhartha. It is more damaging to note that numerous messages have been found in this mobile which indicate his active involvement in cross-border hawala transactions,” the source added.
These sources claim that Siddhartha allegedly ‘admitted’to unaccounted cash. “… in the search action, after considering the evidences gathered by the department, Siddhartha admitted the unaccounted income of Rs 362.11 Crores and Rs 118.02 Crores, in the hands of Siddhartha and M/s Coffee Day Enterprises Ltd respectively in the sworn statement,” the source claimed.
“Siddhartha, subsequently filed the Return Of Income but did not offer the above undisclosed income as admitted in the sworn statement in both the cases except sum of around Rs.35 Crores in his individual case. Even on this admitted sum, the assessee did not pay the Self-Assessment Tax of Rs 14.5 Crs as quantified by him as on date. M/s Coffee Day Enterprises Ltd did not offer the admitted income in its part,”the source further added.
On the Mindtree deal, IT sources say, “On 21st January, 2019 major newspapers had reported that Shri V G Siddhartha is planning to sell the equity shares of Mindtree Ltd held by him and his company immediately. Based on this report, an immediate verification of the facts was carried out. It was found that the assessees Shri V G Siddhartha and M/s Coffee Day Enterprises Ltd together held nearly 21% of shareholding in Mindtree Ltd. It was also gathered that the deal for sale of shares are set to be finalised in January 2019,” said the source.
“The tax effect along with interest and penalty based on the outcome of the search action runs in to hundreds of crores. On the other hand, there was no application filed by the assesses concerned before the assessing officer as required under the statutory provision before transferring any assets when the Income tax proceedings are pending. In order to protect the interests of revenue, the provisional attachment of 74,90000 shares of Mindtree Limited owned by Shri V G Siddhartha and M/s Coffee Day Enterprises Ltd u/s 281B of the Income Tax Act was made(though they together held 2,29,31,518 shares). This action is a normal requirement to protect the interests of revenue,”added the official.
” Subsequently, Siddhartha filed a request letter to release Mindtree shares and in turn offered other security of shares of M/s Coffee Day Enterprises Ltd against the expected demand. This was accepted and the attachment of Mindtree shares were revoked on 13.02.2019 with specific condition that the sale proceeds will be utilized only for repayment of loans availed against the Mindtree Ltd shares by opening escrow account and the remaining balance will be provided for attachment u/s 281B against the tax liability to arise. The alternate attachment 46,01,869 unencumbered shares and 2,04,43,055 encumbered shares of M/s Coffee Day Enterprises Ltd u/s 281B was also made on 13.2.2019 and 14.2.2019,”he added.
” The assessees had transferred the Mindtree Ltd shares to M/s L&T Infotech Ltd 28.04.2019 and received around Rs 3200 crores. Out of this consideration, the assessee had repaid loan of around Rs 3000 cr and paid expenses related to transfer of 154 cr and the balance of Rs 46 cr was paid towards first installment of Advance Tax of estimated MAT liability of around Rs 300 cr in the case of shares of M/s Coffee Day Enterprises Ltd. The provisional attachment was made to protect the interests of revenue out of income the income admitted by assessee based on credible evidence gathered in search action. The Income Tax department has acted as per the provisions of Income Tax Act. The sale proceeds of the Mindtree shares received by VGS is Rs 3200 crore.. out of the MAT payable of Rs 300 crore, only Rs 46 crore has been paid so far,”he clarified.
The note states that Siddhartha faced a lot of harassment from the previous DG , income tax. The officer named is believed to be BR Balakrisnan who is currently the DG, Income Tax,investigation wing and also the Principal Chief Commissioner of IT, Bengaluru. He is set to retire tomorrow.
Authenticity of Siddhartha’s ‘last note’ doubtful, claims I-T source – Economic Times