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Taxman orders special audit of Jet Airways

The central agency has also gathered details of the offshore entities with which Jet and its group companies entered into lease and maintenance and general sales agreements, on the basis of information shared by the Egmont Group.

, ET Bureau|
Last Updated: Jan 22, 2020, 07.46 AM IST
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At least three agencies — the income-tax department, Serious Fraud Investigation Office (SFIO) and the Enforcement Directorate (ED) — are probing Jet Airways.
MUMBAI: The income tax department has ordered a special audit of Jet Airways, after investigations by its arms found a number of suspicious-looking transactions in the accounts of the now-grounded airline, people in the know said.

The department has engaged chartered accountancy firm Shah & Taparia to carry out the special audit, the people said.

“While the investigation wing in its report has detailed out tax irregularities of over Rs 880 crore, the assessment wing has found a lot of other suspicious transactions which amount to over Rs 5,000 crore … these transactions require a thorough probe and a special audit has been ordered,” said an official in the know.

According to the provision that allows the assessing officer (AO) to get the accounts of an assessee audited by a chartered accountant, such a decision can be made based on the complexity and volume of accounts, where there are doubts about the correctness of the accounts and multiplicity of transactions, and when the assessee is engaged in a specialised business activity.

One of the main reasons behind calling for the special audit is the alleged non-cooperation by the airline’s promoter, Naresh Goyal, said the people. “Goyal has always evaded the questions asked by the AO and has claimed ignorance. He has blamed everything on the erstwhile management claiming that he wasn’t managing the day-to-day affairs of the company and therefore wasn’t aware of the various transactions with which he was confronted,” said an official.

“Also, with the erstwhile employees, who were responsible for preparing the audit and managing the affairs of the company, no more associated with the grounded airline, it was difficult to understand certain transactions,” the official added.

Goyal had repeatedly denied any wrongdoing.

At least three agencies — the income-tax department, Serious Fraud Investigation Office (SFIO) and the Enforcement Directorate (ED) — are probing Jet Airways. While the tax department is probing alleged tax evasion, the SFIO is looking into the affairs of the company and the ED is probing allegations of money laundering.

The ED has confronted Goyal with documents related to 19 privately held companies, of which 14 are registered in India and five abroad, the people said.

The central agency has also gathered details of the offshore entities with which Jet and its group companies entered into lease and maintenance and general sales agreements, on the basis of information shared by the Egmont Group.

Toronto-based Egmont is an international network of 164 financial intelligence units formed for combating money laundering as well as terror financing, they said. The ED has questioned Goyal based on this information as well.

Meanwhile, the probe agencies suspect that entities related to Jet Airways’ founder and his associates used thousands of bogus bills to launder around Rs 8,000 crore from the nowdefunct airline in tax havens, people aware of the probe details claimed.

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