I-T raid recovers Rs. 109 crore from Sandalwood biggies

I-T raid recovers Rs. 109 crore from Sandalwood biggies

January 7, 2019

Bengaluru:  The four-day Income Tax (I-T) search and seizure operations against actors and producers, among others, of the Kannada film industry have led to admission of unaccounted for income of Rs. 109 crore, the IT Department said in a statement yesterday.

The Department, however, said: “The searches yielded incriminating evidence on many issues, but no admission has been made. The detection of concealed income will be much higher.” IT officials seized undisclosed assets worth Rs. 11 crore, including 25.3 kg gold jewellery and they also recovered Rs. 2.85 crore in cash.

The raids covered film production companies, film producers, film financiers and actors, the statement said. The raids focussed on three big budget films — ‘KGF’, ‘The Villain’, and ‘Nata Sarvabhouma’, and those searched were their producers Vijay Kiragandur, C.R. Manohar and Rockline Venkatesh, and stars who acted in them, Yash, Sudeep, Shiva Rajkumar and Puneeth Rajkumar, and a key distributor, Jayanna.

Discreet inquiries stretching over three months were conducted for identifying the players, the Department said. Artistes have been found to have accepted remuneration in cash and underreported their income. They had invested money in properties and jewellery, but not declared these investments.

“The searches have been successful in unearthing evidence of suppression of income from film production, distribution and exhibition, as well as evidence of unaccounted for cash expenditure in film production. In particular, evidence of unaccounted for theatre collections in cash and consequential evasion of taxes have been found. Evidence has also been found of suppression of income from sale of audio, digital and satellite rights, unaccounted for cash receipts from distributors and of expenses from undisclosed and unaccounted for sources,” the statement said.

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The statement also said that the Department would launch prosecution against tax evasion at a very early date. Some of the evidence found such as diversion of cash collected by cinemas would be of interest to Revenue and Enforcement agencies and would be duly shared with them.

Among leads that prompted I-T officials to crack the whip on the film fraternity, GST evasion by theatre owners was a key one. Unlike in the past, the theatre owners need not get the stamp of the Commercial Tax Department on film tickets under the GST regime and the exhibitors seem to have taken advantage of this norm to evade tax.

Kannada films were tax-free earlier. Now, they are under GST. Intriguingly, the revenue collection has not gone up, prompting the I-T Department to dig deeper in the matter. “Some evidence — diversion of cash collected by theatres — will be of interest to other revenue and enforcement agencies and will be duly shared with them,” said the I-T Department’s note.

Artistes are covered under services and must pay 18% GST on receipts. But many haven’t. “We are ready to get the cue from the I-T Department and investigate the cases,” said an official from Commercial Tax Department.

ONE COMMENT ON THIS POST To “I-T raid recovers Rs. 109 crore from Sandalwood biggies”

  1. Naveen M says:

    Hi SOM,
    Please post appropriately dated newspaper of “THIS DAY THAT YEAR”. On 07 Jan 2019, the current one posted is dated 30th Dec 2019


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