A private trust linked to Essar Investments Ltd that has come under the scanner of the Central Bureau of Investigation (CBI) for allegedly bribing an Income Tax official to get a favourable order is facing a tax demand of Rs 719 crore, sources have told The Indian Express.
On May 2, the CBI arrested B B Rajendra Prasad, Income Tax Commissioner (Appeals), for allegedly demanding a bribe of Rs 2 crore to give a favourable order in the tax appeal case of the Balaji Trust. The agency also arrested two Essar Group employees Pradeep Mittal and Vipin Bajpai and three others in connection with the case.
“The tax demand on Balaji Trust pertains to assessment year 2013-14 or financial year 2012-13 and is connected to the issue of transfer of brand name to the Trust,” said a CBI source.
The Balaji Trust is a private trust under the Indian Trust Act 1882 and has its registered office at Essar House in Mahalaxmi in Mumbai. The Trust, currently, is the owner of the brand name Essar, certain trademarks and intellectual properties rights.
“The CBI has seized the tax appeal petition filed by Balaji Trust and the subsequent tax order passed by Prasad on April 21 and is currently scrutinising the order for further probe,” said CBI sources.
According to the website of the Controller General of Patents, Design and Trademark, Essar Investments which, earlier, held the trademark for Essar brand, moved the Trademark office on March 18, 2013 for transfer of proprietorship of these trademarks for the brand to Balaji Trust effective from March 29, 2012.
The Trademark office approved the transfer request of Essar Investments on March 12, 2014.
“There was a routine survey of records, conducted by CBI at the offices of two of our executives in connection with some IT assessment orders. Balaji Trust is a responsible corporate citizen and conducts its business in an open and transparent manner. Our executives are cooperating with the investigation fully and will continue to do so. In the present case, legal submissions were made to the relevant authorities on merits through a reputed accounting firm based on which the orders were passed in a routine manner. We categorically deny all allegations regarding any misconduct by our executives. Our executives are innocent and the Company stands by them. We are confident that upon investigations the CBI will come to the same conclusion,” said the official spokesperson of Balaji Trust in an email statement to The Indian Express.
The CBI had on May 2 conducted searches at multiple locations in connection with the case and seized about Rs 1.5 crore that was allegedly paid to the tax official as bribe.It also seized several property documents, details of bank accounts and three lockers. Meanwhile, a Vizag court remanded the six in judicial custody until May 29, 2017.