IT raids on 2 cellphone firms find Rs 1,400-crore understating of profit

Evidence has emerged that the two companies could be under-stating taxable profit by more than Rs 1,400 crore.

The tax department has carried out raids across the premises of foreign mobile phone manufacturers, who could be liable to pay fines of up to Rs 1,000 crore, the finance ministry said on Friday.

The search and seizure operations were carried out across multiple states on December 21. “The search action has revealed that two major companies have made remittance in the nature of royalty, to group companies located abroad, which aggregates to over Rs 5,500 crore. The claim of such expenses does not seem to be appropriate…,” the statement said.

Evidence has emerged that the two companies could be under-stating taxable