In yet another setback to Prannoy and Radhika Roy, Founders of NDTV, the Income Tax Appellate Tribunal (ITAT) has upheld addition of Long Term Capital Gains Tax (LTCG) against them for realising share sale consideration ‘in the guise of loan, The Economic Times reported.
Only last week, markets regulator the Securities and Exchange Board of India (Sebi) banned the group chairman Prannoy Roy and director Radhika Roy from accessing the capital market for two years. SEBI also banned the couple from holding any key managerial position after it found the duo guilty in Vishvapradhan Commercial Private Limited (VCPL) loan case.
The 137-page detailed order by Delhi ITAT referred to a series of transactions, whereby the promoters (Prannoy and Radhika Roy) had sold NDTV shares to RRPR, their own holding company, at a substantially low price and further those shares were pledged to VCPL to raise a huge interest free loan of over ₹400 crore.
During the assessment year 2010-11, Roys had sold their shares in NDTV to RRPR at ₹4 against market price of ₹140 on the BSE. These RRPR shares were used to take a loan from VCPL, a company currently controlled by Mahendra Nahata, board member of Reliance Jio. IT added LTCG on sale of shares by the Roys first to RRPR and then to VCPL.
ITAT order also drew on the SEBI’s 2018 order saying, “The takeover exercise has been conveniently couched as a loan agreement with the predominant intention of VPCL to acquire control over NDTV without contemplating any repayment of the loan.”
The income tax department had contented that NDTV founders Prannoy-Roy and Radhika-Roy supressed income of more than Rs 117 crore each over two assessment years in a June 14 ruling.
Following ITAT, the I-T department is likely to move against the Roys and file a prosecution complaint, akin to a chargesheet, in a competent court.
The order will also arm the enforcement agencies to probe charges of alleged money laundering allegations against the promoter couple.
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