Four officials from Pricewaterhouse & Co today appeared before the Income Tax Department representatives at Chennai, in connection with around Rs 2,500-3,000 crore tax evasion by Nokia. The Department representatives have started questioning the officials after 11 am on Wednesday. It was alleged that the Audit for Nokia was done by Pricewaterhouse & Co's four officials from its Delhi branch and they were the signatories of the audit report and the Auditors misrepresented and signed the Audit reports, which were factually wrong.
Earlier, Pricewaterhouse & Co in a statement said that, "In the matter of the Nokia case, IT Department has called us as they are seeking our inputs on this. We will extend full cooperation to them on this matter."
Sources in the Department said the officials came at 10.20 a.m to the I-T Department office at Chennai and the questioning started from 11.15 a.m. He added, 20-25 officers from the Department are questioning Pricewaterhouse & Co officials.
A senior official, who is close to the case, on condition of anonymity said that "they (Pricewaterhouse & Co) are the audit firm, which advised Nokia India and they are instrumental to transfer the large sum outside India".
The audit for Nokia was done by Pricewaterhouse & Co’s four officials from its Delhi branch and they were the signatories of the audit report and the Auditors misrepresented and signed the Audit reports, which were factually wrong.
Last week, the Department which concluded the investigation, said that Nokia has changed its accounting model and also it is in the process of re-organising the existing business to by pass certain direct and indirect tax liabilities.
K Baskaran, PRO of the Chief Commisioner of Income Tax earlier said "it has been gathered that Nokia India has been making remittances to its Finnish parent Nokia OYJ as payments for software supplies since 2005. The above payments for software would attract TDS as per the provisions of the Income Tax Act 1961. Bit is the learnt that the assesse company has not made any TDS on the above software payments. In order to gather the relevant evidence on the issue, a survey has been organised.
"Prima facie, there appears to be some defaults with respect to TDS deductions on Royalty payments made to its parent company based at Finland. It is also observed that the company has changed its accounting model and also it is in the process of re-organising the existing business to by pass certain direct and indirect tax liabilities," said in the statement.
In this case it was found that Nokia India, the Indian Resident Company, has paid around $5 billion as Royalty in the last six years and the TDS amounts works to $0.5 billion, said an official, who don't want to be named.
According to the Department, the Indian subsidiary of Finland-based handset manufacturer Nokia, has been downloading software from its parent company to manufacture mobile handsets at Sriperumbudur, near Chennai.
