I-T dept surveys BBC India offices

New Delhi: The Income Tax department on Tuesday conducted survey operations at the BBC's offices in Delhi and Mumbai as part of an investigation into alleged tax evasion, officials said. The action, which led to a sharp political debate with the ruling BJP accusing the BBC of venomous reporting and the opposition slamming the move, comes weeks after the broadcaster aired a two-part documentary, “India: The Modi Question”.

The survey is being carried out to investigate issues related to international taxation and transfer pricing of BBC subsidiary companies, officials said. BBC had been served notices in the past but was defiant and non-compliant and had significantly diverted its profits, they alleged. The department is looking at documents related to the business operations of the London-headquartered broadcaster and its Indian arms, they said. The BBC said it is fully cooperating with tax authorities. “The Income Tax authorities are currently at the offices in New Delhi and Mumbai and we are fully cooperating. We hope to have this situation resolved as soon as possible,” the press office of the BBC said on Twitter. The synchronised surprise action began at 11 am with Income Tax officials reaching the BBC offices in Delhi and in Mumbai.

BBC staffers were asked to keep their phones at a particular spot inside the premises and cooperate, officials said. According to I-T rules, transfer pricing generally refers to prices of transactions between associated enterprises which may take place under conditions differing from those taking place between independent enterprises. It refers to the value attached to transfers of goods, services and technology between related entities. It also refers to the value attached to transfers between un-related parties which are controlled by a common entity.