The CBDT claimed that the income and profits reported by various group entities were out of proportion to the size of their operations in India, and the survey teams had found important evidence in the form of employee statements, digital proof, and documents during the survey’s conclusion on Thursday night.
Source: The Lallantop
The Department obtained various pieces of information about the organization’s operations during the survey that show that tax has not been paid on some transfers that have not been disclosed. The survey activities also showed that seconded employees’ services had been used, for which the Indian company had reimbursed the relevant foreign business.
Withholding tax was also supposed to be applied to this transfer, but it wasn’t. A number of anomalies and inconsistencies in relation to Transfer Pricing documents have also been revealed by the survey. According to the CBDT, these inconsistencies are related to the level of relevant Function, Asset, and Risk (FAR) analysis, improper use of comparables that apply to determine the proper Arms Length Pricing (ALP), and inappropriate income allocation, among other things.
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