Suppression of Rs 300-cr box-office income by film production house: Govt

Ministry of Finance says 'two leading film production companies, a leading actress and two talent management companies' are under I-T scanner

A day after Income Tax Department conducted searches in Mumbai, government on Thursday said search and survey operations are being carried out on "two leading film production companies, a leading actress and two talent management companies".

"Search operation is being carried out at Mumbai, Pune, Delhi and Hyderabad. The group is mainly engaged in the business of Production of Motion Pictures, Web Series, acting, direction and talent Management of celebrities and other artists. A total of 28 premises are being covered in different locations which includes residences and offices," said Ministry of Finance in a statement without naming anyone. 

"During the search, evidence of huge suppression of income by the leading film production house compared to the actual box office collections has been unearthed. The company officials have not been able to explain discrepancy of around Rs 300 crore," the ministry further said. 

Evidence related to manipulation and under-valuation of share transactions of the production house amongst the film directors and shareholders, having tax implication of about Rs 350 crore has been found and is being further investigated, said government. 

It may be recalled that on Wednesday income tax raids were conducted at the homes and offices of Bollywood actor Taapsee Pannu, filmmaker Anurag Kashyap and others.

The searches against Pannu and Kashyap as well as his partners who launched the now shuttered production house Phantom Films were carried out across 30 locations in Mumbai and Pune. They were part of a tax evasion probe against Phantom Films, officials said.

Pannu and Kashyap were shooting in Pune and are understood to have been questioned by the tax sleuths as part of the preliminary questioning that takes place during raids.

The raids also covered Reliance Entertainment group CEO Shibhasish Sarkar and some executives of celebrity and talent management companies KWAN and Exceed.

"Evidence of cash receipts by the leading actress amounting to Rs 5 crore has been recovered. Further investigation is going on," said the ministry on Thursday. 

"Apart from this, non-genuine/bogus expenditure to related concerns by the leading producers/directorhaving tax implication of about Rs 20 crore has been detected. Similar findings have been made in the case of the leading actress also. At the office premises of the two talent management companies,  huge amount of digital data has been seized in the form of emails, whatsapp chats, hard disk etc which are under investigation. During the search, 7 bank lockers have been found which have been placed under restraint. Search is continuing in all the premises," said Ministry of Finance.