NEW DELHI: The IT department has attached the shares of three companies through which realty firm Unitech Ltd holds about 33% stake in mobile phone company Unitech Wireless for alleged outstanding income tax dues.
Realty firm Unitech acknowledged the development and clarified that the demand orders were issued to its group companies and added the managements of these firms had challenged the same.
Norway’s Telenor owns a controlling stake in Unitech Wireless, which offers services under the Uninor brand, and both JV partners are involved in an ownership dispute before the Company Law Board (CLB), a quasi-judicial body that rules on corporate disputes.
The IT department has now told the CLB that it has attached the shares of Simpson Wireless, Cestos Wireless and Acrous Wireless ‘owing to outstanding tax liability and to protect the department’s interest. These three companies are the investment vehicles through which realty firm Unitech holds a minority stake (32.75%) in mobile phone JV. The IT department in a series of communications to the CLB has said that the three Unitech Group companies had outstanding income tax dues to the tune of Rs 701 crore. It has also asked the CLB to take the provisional attachment of shares of these three companies when issuing orders in this case.
Responding to an ET query, the Unitech spokesperson said: “At the outset, we would like to clarify that no demand order has been issued to Unitech Ltd. by income-tax authorities for its shareholding in Unitech Wireless. However, in case of our two group companies, tax department has issued a demand order based on the “presumptive gains” on their shareholding in Unitech Wireless, without there being any actual sale of shares by these companies and consequent profit to them. The management of these group companies has challenged the demand order of the tax department before the Hon’ble Commissioner of Income Tax (Appeal).”
The Unitech Ltd spokesperson declined to offer further comments as the ‘matter was sub-judice’ and added that the ‘management of these companies were confident that such baseless tax demand would be set aside by the concerned authorities’.
In a March 19 communication, the IT department said Simpson Wireless owned it Rs 272.21 crore based in its assessment proceedings for 2009-10. The communication also adds that debentures of eight subsidiaries for Rs 500 crore have also been attached as assets of Simpson Wireless. In another communication (dated March 15), the IT department told the CLB that there was an outstanding demand of Rs 179 core on Centos Wireless during the same period, and it has therefore attached its (Centos’s) shares in Unitech Wireless. With regard to Acros Wireless, the IT department said that the assessment for the 2009-10 period was in an advanced stage and likely to be finalised soon. “A demand for nearly 250 crores is likely to be created in this case and to protect the interest of the Revenue, provisional attachment of shares of Unitech Wireless held by Acorus Wireless for recovery of income tax dues has already been done on January 4, 2012,” the communication added.
The IT department’s move will further complicate the bitter spat between both JV partners. ET had reported that that Unitech had sought about $150 million from Telenor to sell its 32.7% stake in their telecom joint venture and end the bitter dispute between two partners, but the Norwegian firm had rejected this offer. This resulted in Unitech asking the CLB that this issue be settled through arbitration, a move that was opposed by Telenor.
On Tuesday, Telenor told the CLB that Unitech Ltd could not seek arbitration as it already had filed a petition before the Company Law Board. “Arbitration is consensual remedy. They cannot ask for arbitration after having filed petition before this honourable court,” Telenor Counsel S N Mookherjee said. The CLB will continue to hear the case on Wednesday.
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