NDTV says Rs 450 cr tax demand is "erroneous"

Media firm NDTV today said the Rs 450 crore tax "demand was levied on erroneous and incorrect view taken by the tax department".
In a clarification to the BSE, NDTV also said it has not violated the listing agreement regarding disclosure of key information and the charges are "baseless and without merit".
The BSE had sought clarification from NDTV with respect to complaints of non-disclosure of tax liability of Rs 450 crore.
Replying to point-wise queries in terms of the relevant provisions of the listing agreement, the company said "NDTV submits that we have clarified our position with respect to the queries of exchange on various disclosures...."

"As stated in our earlier submissions, the matter relates to tax demand of Rs 450 crore raised vide the Assessment order dated February 21, 2014 issued by the tax department for the assessment year 2009-10 (Financial Year 2008-09).
"The aforesaid tax demand has resulted due to erroneous and incorrect view taken by the tax department that the transaction vide which an investment of USD 150 million was made by NBC Universal, Inc and Universal Studios International B V in an overseas subsidiary of NDTV, is a 'sham' transaction."

"NDTV submits that the said transaction was indeed a bonafide and genuine transaction...Further, the documents and confirmations required by the tax department during the course of assessment and investigation proceedings were provided to the tax department..."

The company further said it has filed an appeal before the ITAT challenging the Assessment Order and the same is pending final determination before the ITAT and is currently sub-judice.
"Therefore, it was felt that the disclosure of these events in isolation, without any reference to the steps proposed to be taken by the company, was not desirable," it informed the exchange.
Such a disclosure would also be against the spirit of the listing agreement as an issue which is sub-judice, would lead to an incomplete representation of the matter to be made to the shareholders, it added.
NDTV said ITAT allowed the tax demand to be stayed on payment of an amount of Rs 5 crore.

"Further, according to a senior counsel who has opined on the matter, the issues before the ITAT are presently pending final adjudication and NDTV has a strong arguable case, and in all likelihood the issues involved deserve to be decided in NDTV's favour," it said.