C Shivakumar
Chennai:
Double Oscar and Grammy winner AR Rahman’s Trust is now under the
scanner for violation of provisions of Foreign Contribution Regulation
Act (FCRA) 2010 as well as alleged tax violation which is refuted by
the officials of the trust.
While Income Tax sources claim Rahman’s Trust has been sent notice for
evading taxes worth Rs 3.47 crore, the Trust auditor Sadagopan says
that they have gone on appeal before Income
Tax Commissioner (appeals) and denied Rahman has anything to do with
evasion of taxes.
It is learnt that Rahman prepared an exclusive ringtone for Lebara, a
UK based mobile company in 2010-11. The remuneration the company
provided to Rahman was USD7,50,000, which as per Indian exchange rate
then was 3.47 crore.
Income Tax sources said that Rahman allegedly tried to evade paying
taxes by asking Lebara to transfer the amount to his trust, A R Rahman
Foundation. However, Sadagopan denies it. “They have assessed Rs 3.47
crore stating that it is from anonymous source. We have maintained it
is from Lebara. We have already paid 50 per cent of taxes and the
appeal is pending before Income Tax commissioner (Appeals). This is
nothing to do with tax evasion. On the other hand Rahman is keen to
pay the taxes,” he said.
But Income Tax sources said this is not a voluntary contribution. “It
was a service rendered by A R Rahman and not the trust as such the
amount is taxable. This is clearly a case of tax evasion,” the sources
said.
Interestingly, it is also learnt that the trust doesn’t enjoy FCRA
approval for receiving foreign donation. “This also tantamount to FCRA
violation,” said sources. “Rahman should have sought prior permission
under Foreign Contribution Regulation Act, 2010 before getting the
fund transferred to his account. “But in this case, he has not done
it,” the source said.
Sadagopan confirmed about the FCRA violation. He said the amount is
still kept in the fixed deposit of Canara Bank. “We have not yet
touched the amount pending FCRA approval. Intelligence Bureau
officials had come to our office and scrutinized the records. We are
awaiting further details from Ministry of Home Affairs,” Sadagopan
said.
It is gathered that income tax department has informed the Ministry of
Home Affairs to take necessary action for FCRA violation by his trust.
It is learnt that Income Tax department has served notice to Rahman’s
trust on 2013 demanding taxes for Rs 3.6 crore (3.47 crore plus
interest).
Factfile:
--- AR Rahman enters into three year collaboration with Lebara mobile
in 2010-11
n The deal includes composing ringtone for Lebara
n To make available exclusive songs and ringtones for Lebara music
during collaboration
n Creating music for Lebara mobile for three years towards which
Lebara sponsored Rahman’s UK tour
Why FCRA violation:
--- As per provisions of FCRA and the amended act of 2010, a trust
which recieves foreign contribution has to be registered under FCR Act
with Ministry of Home Affairs
---- The firm should file Form Number FC-6 detailing the purpose of
foreign contribution and its utilization
----- The foundation failed to register under FCR Act besides not
obtained permission from Ministry of Home Affairs while transferring
3.47 crore
A R Rahman Trust’s justification:
--- The Trust got the amount from a known source (Lebara) rather an
unknown source. As such it is should not be called tax evasion
--- Paid 50 per cent of the taxes even though they have gone on
appeal. Trust says it can’t be called tax evasion as they are willing
to pay the amount
---Trust has left the amount untouched and filed for registeration
under FCR Act besides seeking permission from Ministry of Home Affairs
Chennai:
Double Oscar and Grammy winner AR Rahman’s Trust is now under the
scanner for violation of provisions of Foreign Contribution Regulation
Act (FCRA) 2010 as well as alleged tax violation which is refuted by
the officials of the trust.
While Income Tax sources claim Rahman’s Trust has been sent notice for
evading taxes worth Rs 3.47 crore, the Trust auditor Sadagopan says
that they have gone on appeal before Income
Tax Commissioner (appeals) and denied Rahman has anything to do with
evasion of taxes.
It is learnt that Rahman prepared an exclusive ringtone for Lebara, a
UK based mobile company in 2010-11. The remuneration the company
provided to Rahman was USD7,50,000, which as per Indian exchange rate
then was 3.47 crore.
Income Tax sources said that Rahman allegedly tried to evade paying
taxes by asking Lebara to transfer the amount to his trust, A R Rahman
Foundation. However, Sadagopan denies it. “They have assessed Rs 3.47
crore stating that it is from anonymous source. We have maintained it
is from Lebara. We have already paid 50 per cent of taxes and the
appeal is pending before Income Tax commissioner (Appeals). This is
nothing to do with tax evasion. On the other hand Rahman is keen to
pay the taxes,” he said.
But Income Tax sources said this is not a voluntary contribution. “It
was a service rendered by A R Rahman and not the trust as such the
amount is taxable. This is clearly a case of tax evasion,” the sources
said.
Interestingly, it is also learnt that the trust doesn’t enjoy FCRA
approval for receiving foreign donation. “This also tantamount to FCRA
violation,” said sources. “Rahman should have sought prior permission
under Foreign Contribution Regulation Act, 2010 before getting the
fund transferred to his account. “But in this case, he has not done
it,” the source said.
Sadagopan confirmed about the FCRA violation. He said the amount is
still kept in the fixed deposit of Canara Bank. “We have not yet
touched the amount pending FCRA approval. Intelligence Bureau
officials had come to our office and scrutinized the records. We are
awaiting further details from Ministry of Home Affairs,” Sadagopan
said.
It is gathered that income tax department has informed the Ministry of
Home Affairs to take necessary action for FCRA violation by his trust.
It is learnt that Income Tax department has served notice to Rahman’s
trust on 2013 demanding taxes for Rs 3.6 crore (3.47 crore plus
interest).
Factfile:
--- AR Rahman enters into three year collaboration with Lebara mobile
in 2010-11
n The deal includes composing ringtone for Lebara
n To make available exclusive songs and ringtones for Lebara music
during collaboration
n Creating music for Lebara mobile for three years towards which
Lebara sponsored Rahman’s UK tour
Why FCRA violation:
--- As per provisions of FCRA and the amended act of 2010, a trust
which recieves foreign contribution has to be registered under FCR Act
with Ministry of Home Affairs
---- The firm should file Form Number FC-6 detailing the purpose of
foreign contribution and its utilization
----- The foundation failed to register under FCR Act besides not
obtained permission from Ministry of Home Affairs while transferring
3.47 crore
A R Rahman Trust’s justification:
--- The Trust got the amount from a known source (Lebara) rather an
unknown source. As such it is should not be called tax evasion
--- Paid 50 per cent of the taxes even though they have gone on
appeal. Trust says it can’t be called tax evasion as they are willing
to pay the amount
---Trust has left the amount untouched and filed for registeration
under FCR Act besides seeking permission from Ministry of Home Affairs
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