Case: At the hearing yesterday at the Phuentsholing drungkhag court, Jatan Prasad Lalchand Prasad (JPLP) submitted that its actual tax liability amount is Nu 8.69 million and not Nu 184.90 million as reflected by the Office of Attorney General (OAG).
Statutory auditor Spandan Sengupta of M Mukherjee & Co that RAA empanels has determined the new figures, said the defendant.
Whether the defendant is liable or not, considering the fines and penalties as per the income tax Acts, 2001, JPLP said that it is liable to only Nu 8.69 million for income years between 2011 and 2014.
According to the report submitted to the court by JPLP’s counsels, “the defendant at the very outset categorically denied this astronomical amount of tax.” Without considering the fines and penalties, the tax payable amount drops further to Nu 2.73 million, added the defendant.
JPLP’s legal counsel said that the inclusive selling price was wrongly identified as tax liability amount. Considering Nu 10 as purchase price of a particular product and its selling price Nu 20 in the market, the prosecution established the latter as the tax liability amount.
Usually, selling price includes profit margin and other expenditures such as transportation. The defendant’s counsel said that tax liability must be on the cost of goods.
JPLP said that discrepancy was caused mainly because the prosecution had not prepared full accounts and overlooked the direct cost (purchase), while taking into account the sales that had escaped assessment.
The submission report stated that the prosecution had erroneously claimed that the defendant had over-stated a purchase of Nu 49.91 million for the income year 2011 and treated the same as income.
All the purchase bills for 2011 are ones that have already been verified by RRCO, which is also audited and verified by the statutory auditor.
“This simple error caused the OAG to falsely claim an amount to the tune of almost Nu 60 million,” said the defendant.
The findings that JPLP submitted to the court yesterday are independent findings of Spandan Sengupta.
OAG will submit its findings on March 3.
Rajesh Rai, Phuentsholing