Mumbai zone I-T collection slips

Income tax collection from Mumbai zone fell short of the target in 2005-06. The I-T department collected Rs 53,000 crore from the Mumbai zone in 2005-06 against the target of 57,700 crore.

"The collection is not disappointing given the underperformance of the banking sector and oil companies," said H Tulsiyan, chief commissioner of Income Tax department, Mumbai.

The department had collected around Rs 42,000 crore in 2004-05. The most remarkable feature of 2005-06 was the unearthing concealed income. As per available data, a total of 71 surveys and searches led to unearthing of undisclosed income of around Rs 355 crore as against Rs 235 crore in 2004-05.

The major routes of tax evasion were investment in penny stocks, booking of bogus bills for capital gains and losses, and understatement of commission income by travel agents.

According to officials, the travel agents receive commission from central reservation authorities. However they show it as loans and advances and not commission receipts and end up distorting the income on the books.

Advance tax payments for the fourth quarter were a major contributor to the total annual collections.

The fourth quarter witnessed strong mop up with IndianOil Corporation (IOC) figured prominently in the list of taxpayers by paying Rs 542 crore. It was next only to Life Insurance Corporation, which paid Rs 655 crore in the fourth quarter.

IOC did not pay advance taxes for the first and third quarters, but paid a meagre Rs 67 crore as advance tax for the second quarter.

However, tax paid by IOC in a single instalment in the fourth quarter has been the highest since 2003. The company had paid Rs 1,384 crore as corporate tax in 2004-05.

IOC also made an additional payment of Rs 500-600 crore through sale of oil bonds before the end 2004-05. These bonds were offered to the oil companies by the government to compensate for the loss incurred by not hiking oil prices in the retail domestic market in line with international oil prices.