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HYDERABAD: Income-Tax officials on Tuesday quizzed Margadarsi Chit Funds managing director Sailaja Kiron as part of the probe on Margadarsi Financiers’ deposit raising activity. The I-T officials are now probing the cross transactions between Margadarsi Chits and Margadarsi Financiers, sources said.
Sailaja Kiron was summoned by the I-T officials for violating certain sections of the I-T rules particularly with regard to the exchange of funds within the outfits of the same group. According to the sources, the I-T officials are now trying to probe allegations that Margadarsi Financiers had diverted some funds to the chit fund company and the amounts released after regular auctions in the chid fund too were converted into deposits in Margadarsi Financiers.
Sailaja had to stay at the I-T office for about 35 minutes during which she was asked to either confirm or deny the allegations. “She will get back to us with more details on this and we have recorded her statement,” the source said.
Recently Income-Tax officials had arrested filmstar Krishna’s son Ramesh Babu, director of Padmalaya Enterprises private limited, and Krishna’s brother, Adisheshagiri Rao for evading tax.
However, the I-T officials let them off after keeping their land records as security on Tuesday. “They said that they will pay the arrears soon and we let them go after collecting their land records as security,” a senior I-T official said. “Big defaulters will not be allowed to go scotfree. There will be more raids,” another senior I-T official disclosed.
Moves HC for tax exemption
Sailaja Kiron, on Tuesday filed a writ petition in the Andhra Pradesh High Court seeking to restrain the Union finance ministry, the central board of excise and customs and the authorities of the central excise and customs wing at Hyderabad from issuing notices asking for payment of service tax or face action.
Sailaja Kiron said the Finance Act of 1994 clearly omits all chit fund companies from the purview of any such levy. “We do not fall under the category of banks and other financial institutions, the authorities are insisting on the payment of service tax with arrears from June 2007,” she said.
Reserve Bank of India had advised that the business of chit funds is to mobilise cash from the subscribers and effectively cause movement of such cash to keep it working, she said.
Therefore, she added, the activity of the chit funds is in the nature of cash management which is specifically excluded from the scope of banking and other financial services. The central government, through an amendment, brought the Finance Act of 2007 and deleted a portion of a sentence from the 1994 act which has excluded cash management.
Even the new act she contended did not empower authorities to issue notices to chit fund companies. She sought an interim stay on all the proceedings of the excise and customs authorities till the matter was adjudicated.
Courtesy: TimesOfIndia
