I-T dept gets involved in wrangle over Kingfisher House

Stakes first claim to property after reiterating its claim to non-payment of Rs 350 crore in dues from the company

While Kingfisher Airlines Ltd and its lenders wrangle for its Mumbai property, Kingfisher House, the Income Tax department has staked the first claim to the property after reiterating its claim to non-payment of about Rs 350 crore in dues from the company.

The I-T Department has issued an advertisement in newspapers saying that any person transacting in the property will be held in violation of the second schedule of Income-tax Act, 1961 and will be liable for all the consequences.

The claim from the I-T  department has been reiterated after the Karnataka High Court rejected a plea from Kingfisher Airlines’ that sought to prevent lenders to the company to seize the property. SBICAP Trustee Company had last month moved to seize the property to recover some of its dues to the defaulting airline.

Vijay Mallya-led Kingfisher Airlines is staggering under dues of about Rs 7000 crore and had ceased operations in October last year.  Lenders have take steps to seize Mallya’s properties, including the Kingfisher Villa in Goa, pledged as collateral in a bid to recover some of their dues.

The I-T  department too had initiated proceedings against Mallya’s company in a special court for economic offences, earlier this year, in  a bid to recover its dues.
The department claims that Kingfisher Airlines had deducted tax at source from their employees’ salary and other payments for many years but had failed to remit to the government account.

“Income-tax Department has attached all assets of the Company and is in the process of recovering its dues by sale and attachment of assets and properties of defaulter company,” a statement from the I-T department said. “Kingfisher House at Western Express Highway near the domestic terminal of the Mumbai Airport is under attachment under the second schedule of the Income-tax Act, 1961,” it added.

The department has cited a provision under the Income-tax Act, 1961, that provides them priority over other debts that have to be paid by a defaulter.  “As such the dues of Income-tax Department will have to be settled first before the lender consortium of banks can stake any claim to the property,” the statement said.

The I-T department also alleged that the company had failed to honour a High Court directive “to pay 50 per cent of the demand and furnish bank guarantee for the remaining amount and Special Leave Petition has been dismissed by Supreme Court."