Kingfisher accused of evading Rs 35 cr tax in plane deal

Claiming that the transaction took place in state, commercial tax dept sent notice to Vijay Mallya. The airline moved HC, saying the deal was carried out in ‘international space’. Judge asks the tax dept to conduct fresh inquiry.
Kingfisher Airlines, owned by liquor baron and Rajya Sabha MP Vijay Mallya, has come under the scanner of the state commercial tax department for tax evasion. In an order, dated February 11, 2011, the department has asked Mallya to cough up tax and interest amounting to Rs 35 crore on sale transaction of an Airbus A 319 – 133 CJ, a plush aircraft the MP has allegedly used personally.
Challenging the tax evasion notice, Mallya’s firm moved the High Court of Karnataka. When the case came up for hearing on April 4, Justice H G Ramesh asked the commercial tax department to look into the matter afresh. He neither upheld the tax evasion notice nor quashed it.
“They (Kingfisher Airlines) have evaded tax on sale transaction of an Airbus plane,” KM Shivayogi Swami, advocate for the commercial tax department, told Bangalore Mirror. “The department has ordered the airline to pay tax for the transaction carried out in the state.”
The commercial tax department maintains that the sale transaction between Mallya’s firm and another company, identified as C J Leasing (Cayman) Limited, took place in Bangalore, and the sale agreement was registered at a sub-registrar’s office in the city. But Kingfisher Airlines, in its petition to the high court, has stated that the transaction took place in Germany, and so it is not liable to pay any tax to the state.
22/04/11 Chetan R/Bangalore Mirror

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Categories: Kingfisher Apr 2011