Fresh trouble for Sahara: Aamby Valley gets Rs 24,647 cr I-T notice, biggest tax penalty on any corporate

In fresh trouble for Subrata Roy of Sahara group, the income tax department has slapped a Rs 24,647 crore demand notice on its Aamby Valley project, said a report in The Times of India. The demand has been raised for the assessment year 2012-13 after the department added Rs 48,000 crore to Aamby Valley’s income. According to the report, this will be the biggest tax penalty slapped on any corporate in India. The penalty indicating tax evasion attempts made by the company comes at a time when the Supreme Court has ordered auction of Aamby Valley to raise the money the group has to pay back the investors. Last week, the court decided to sell Rs 34,000 crore worth properties of the Sahara Group at the Aamby Valley and sought Subrata Roy’s presence on 27 April when it could consider sending him back to jail. “As no amount has been deposited by the contemnor (Roy), we are inclined to go ahead with auction for the Aamby Valley City near Lonavala, Maharashtra,” a bench headed by Justice Dipak Misra said on 17 April. [caption id=“attachment_1199369” align=“alignleft” width=“380”]  Subroto Roy, Chairman, Sahara Group. PTI[/caption] Making its mind clear, the bench, which also comprised Justices Ranjan Gogoi and A K Sikri, said the interim orders granting reliefs, including parole to Roy, “shall remain in force till April 27, as on that day, this court may rethink of varying the interim order of bail and think of sending the contemnor (Roy and others) to custody.” During the hearing, the bench said, “Enough is enough. You cannot say something today and resile tomorrow” and took strong note of the non-submission of money. The group was to submit Rs 5092.6 crore in Sebi-Sahara refund account, which is to be used to refund the investors as ordered by the Supreme Court in 2012. The group was ordered to repay about Rs 25,000 crore, including interest, to investors in its illegal optionally fully convertible debentures. The bench also cautioned Roy from playing with the court’s order and said non-compliance of its order would invite the wrath of the law. The court agreed to amicus curiae Shekhar Naphade’s suggestion that Official Liquidator (OL) of the Bombay High Court be directed to conduct the sale of Aamby Valley and asked Roy and market regulator SEBI to provide necessary details of Aamby Valley properties to the OL within 48 hours of receipt of the order. It directed the apex court registry to send a copy of its order to the OL, who, in turn, “must complete the exercise of valuation within ten days and send a report to this court”. Reacting to the order, the group had said that Aamby Valley was valued at Rs 1 lakh crore. “Since last three hearings, the court is insisting about Aamby Valley auction. The market valuation of Aamby Valley is above Rs one lakh crore, so auctioning under distress will be undue favour/benefits for any bidder,” lawyer Gautam Awasthi said on behalf of the group. According to the ToI report today, Aamby Valley had shown a loss of about Rs 14 crore in 2012-13. However, a special audit by the income tax department found that the company’s 8 special purpose vehicles had made an income of more than Rs 27,000 crore. The report said a dispute resolution panel later confirmed this, over-ruling the company’s plea contesting the department’s assessment thus resulting in a tax demand. It remains to be seen whether the tax penalty is will have a bearing on the auction of the properties.