Mumbai: Irregularities in transactions between Jet Airways and its Dubai-based group companies have allegedly been discovered by the Income-Tax (I-T) department, which believes that the cash-strapped airline is likely to have done so to evade taxes worth around Rs 650 crore. The Income Tax department's investigative wing has prepared a report on the matter and forwarded it to the assessment division, which will ask for a response from Jet Airways and then come to a decision on whether they are to raise a tax demand or not.
"Jet Airways would like to clarify that it has not received any communication from I-T department so far. Hence, the airline is unable to comment on the same," a Jet Airways spokesman said.
The matter was brought to the I-T department's notice around five months ago while carrying out a survey on Jet Airways, I-T officials said. Each year, Jet had been paying commission to its general sales agent in Dubai, a part of its Dubai-based group company. Under the Income Tax Act, the commission was allegedly in excess of the permissible business transactions.
"In September last year, based on specific information, a survey under section 133 (A) of the I-T Act was carried out at the business premises of the airline. During the said survey, documents were seized. Upon inquiry, some transactions concerning a Dubai-based entity were found to be of suspicious nature. These pertain to commission paid by the airline to the said entity," said an official.
"The entire amount is around 650 crore," added the official.
He added that these transactions could not be explained. "These are excessive payment made with the intent to divert funds abroad, done with the sole intention to evade taxes."
Jet, India's biggest full-service carrier by market share, has been grappling with financial woes for nearly six months and owes money to banks, pilots, vendors and lessors due to rising fuel costs and intense competition.