Mumbai: The Income Tax department has initiated probe into alleged evasion of tax liabilities amounting to Rs 2,700 crore by the Hinduja Group linked to a sale transaction of group company Hinduja Global Solutions (HGS) to another subsidiary NXTDigital.
The taxmen are probing Hinduja Global Solutions sale of its healthcare services business to wholly-owned Netherland-based subsidiary Betaine BV. “Hinduja Group subsequently merged digital media and communication business NXTDigital into HGS,” a senior tax official alleged.
The National Stock Exchange and the Bombay Stock Exchange sought clarifications from HGS late Wednesday while IT department has alleged tax evasion on capital gains pegged at around Rs 1,000 crore was detected in the deal.
Hinduja Global Solutions denied having received any demand notices and in a statement said, “queries were raised in last year's IT survey concerning the said M & A transaction and suitable answers and documents were furnished backed by opinions of legal and tax experts.”
The truck to tech conglomerate further added adding that the group had not received any demand notices. HGS clarified it strongly believed that the M&A process was in line with the tax laws. “If the tax authorities send notices, they would be legally contested as per prevailing procedures and laws,” HGS said.
The tax authorities allege that this transaction was structured to avoid potential taxes to a tune of Rs 1,700 crore. It may be noted that application of GAAR related liabilities has been a contentious issue in the past in India.
The tax evasion probe involves the General Anti-Avoidance Rule (GAAR) of the Income Tax Act on the tax implications arising out of the merger of HGS with loss making entity NXTDigital.
The tax authorities allege that the transaction was structured to avoid potential taxes to a tune of Rs 1,700 crore. The tax probe stems from the evidence gathered during IT survey in November 2023 at Hinduja Global Solutions in Mumbai and several other cities.
The London based Hinduja Group includes Hinduja Leyland Finance, Hinduja Bank (Switzerland), Ashok Leyland, Hinduja Foundries, Switch Mobility, PD Hinduja National Hospital and Medical Research Centre and Hinduja Tech Limited amongst several businesses spread across the globe.
