A day after concluding the survey of BBC offices in Delhi and Mumbai, the Income Tax department on Friday (17 February) said that the I-T teams have revealed "several discrepancies and inconsistencies with regard to Transfer Pricing documentation".

The nearly three-day long survey began on Tuesday to probe issues related to international taxation and transfer pricing of BBC subsidiary companies, and concluded on Thursdsay night.

In a statement, the I-T department said that during the course of the survey of BBC offices, it gathered several evidences pertaining to the operation of the organisation "which indicate that tax has not been paid on certain remittances which have not been disclosed as income in India by the foreign entities of the group".

"The survey revealed that despite substantial consumption of content in various Indian languages (apart from English), the income/profits shown by various group entities is not commensurate with the scale of operations in India," it said.

According to the IT Department, the survey operations also revealed that "services of seconded employees have been utilised for which reimbursement has been made by the Indian entity to the foreign entity concerned. Such remittance was also liable to be subject to withholding tax which has not been done".

"Further, the survey has also thrown up several discrepancies and inconsistencies with regard to Transfer Pricing documentation," it said, adding that such discrepancies relate to level of relevant Function, Asset and Risk (FAR) analysis, incorrect use of comparables which are applicable to determine the correct Arms Length Price (ALP) and inadequate revenue apportionment, among others.

The survey operation has resulted in unearthing of crucial evidences by way of statement of employees, digital evidences and documents which will be further examined in due course, the department said.

The tax authority noted that during the survey, statements of only those employees were recorded whose role was crucial including those connected to, primarily, finance, content development and other production related functions.

"Even though the Department exercised due care to record statements of only key personnel, it was observed that dilatory tactics were employed including in the context of producing documents/agreements sought," the I-T department said.

"Despite such stance of the group, the survey operation was conducted in a manner so as to facilitate continued regular media/channel activity," it added.