From The Sip Trunking Experts

TMCNet:  Tax evasion case: I-T dept summons Nokia auditors [Hardware] [Times of India]

[January 18, 2013]

Tax evasion case: I-T dept summons Nokia auditors [Hardware] [Times of India]

(Times of India Via Acquire Media NewsEdge) COIMBATORE: The income tax department has summoned senior officials of Nokia India Limited and auditors from the multinational audit firm Price Waterhouse and Company (PW&Co) to the Chennai I-T office later this week for clarifications in the aftermath of financial records seized in a raid at the Chennai facility of the Finnish mobile phone giant indicating massive tax evasion to the tune of around Rs 3,000 crore. I-T officials have claimed that they found some incriminating emails exchanged between the audit firm and Nokia in which ways to avoid proper tax payment were discussed.

In a statement, PW&Co said that they have been asked to come to Chennai while Nokia India in an email said they will co-operate with the I-T investigation. Four auditors from PW&Co, Delhi, are expected to appear before the I-T sleuths on January 16 at 11am. Nokia India officials are expected later in the week.

However, Nokia India did not specifically indicate in the email if senior officials have been asked to appear before tax authorities though I-T officials in Chennai said Nokia India's managing director, chief finance officer and taxes section head have been asked to appear at the I-T office in Chennai on January 17 and 18. Meanwhile, senior Nokia officials from the Chennai office have been told to appear before for queries on January 21. "We have seized financial documents and emails sent from PW&Co to Nokia, which reveals that tax evasion was conducted in a deliberate and planned manner in co-ordination with auditing officials from the firm," said a senior official involved in the I-T probe.

"The auditors and the firm were involved in causing massive losses to the national exchequer. The fluctuation in the dollar rates will also be taken into account before the final scope of tax evasion is calculated," said a senior IT department official.

According to I-T officials, Nokia India was supposed to pay Rs 16,000 crore as royalty charges to their head office in Finland after 10% tax deduction at source. However, I-T sleuths claimed that these transactions were shown in the audit report under procurement of 'raw materials' to evade tax payment for the last six years.

The company has also come under the I-T scanner for misappropriation in transfer pricing of its products during this period. The firm, however, has time to rectify the transfer pricing records for the financial year 2011-12, but could be penalised for the documents submitted for previous years, officials added. Nokia India has stated that they always follow the applicable laws and regulations in the countries where they operate. "Nokia is fully co-operating with the local tax authorities to ensure they get the necessary information to help in their inquiry," stated the official statement.

(c) 2013 Bennett, Coleman & Company Limited

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