Thread by @iAnkurSingh

V G Siddhartha issue is about raids and 132 action carried out on 21.09.2017.

After investigation, Siddhartha admitted income of Rs. 362.11 Cr and Rs 118.02 Cr, in the hands of Shri. V G Siddhartha and his M/s Coffee Day Enterprises Ltd respectively.

The notices u/s 148 for AY 2011-12 and 153A for AY 2012-13 to 2017-18 were issued.

In response, Siddhartha filed the ROI but did not offer the above undisclosed income as admitted before the DDIT in both the cases except sum of around Rs. 35 Crs in the individual’s case.

One of his group M/s Coffee Day Global Ltd did not pay the Self-Assessment Tax of Rs 14.5 Crs for AY 2018-19 and it was a regular AT defaulter in the earlier AYrs and resorting to SAT payment.

On 21st January, the news of Siddhartha planning to sell the equity shares of Mindtree Ltd held by him came.

Siddhartha holds 54,69,750 shares and M/s Coffee Day Enterprises Ltd holds 1,74,61,768 shares of Mindtree Ltd. The value of shares of Mindtree was around Rs 880/share.

These undisclosed income led to addition of Rs 299.5 Cr in the case of Shri V G Siddhartha.

The estimated tax liability with interest along with penalty will be around-

a) Rs 447.47 Cr for Siddhartha
b) Rs 188.69 Cr for M/s Coffee Day Enterprises

Siddhartha did not file any application before the Assessing Officer seeking permission u/s 281 of Income Tax Act, 1961 as required before transferring any assets when the proceedings pending.

Why he wanted to sell the shares without knowledge of tax authorities?

Therefore it was necessary to initiate the proceedings u/s 281B of Income Tax Act. The orders u/s 281B was issued on 25.01.2019.

74,90,000 shares out of 2,29,31,518 shares of Mindtree were attached only to the tune of estimated tax liability of Rs 447.47 Cr and Rs 188.69 Cr.

Siddhartha then requested for revocation of attachment since entire Mindtree shares were already pledged against the loan of around Rs.3000 cr by offering alternate attachment of 46 lakhs unencumbered shares of M/s Coffee Day Enterprises Ltd worth Rs 125 crores.

Since entire Mindtree shares were already pledged against the loans, request for revocation was accepted with specific conditions that the sale proceeds will be utilized only for repayment of loans availed by opening escrow account and  the remaining balance will be provided.

Siddhartha had transferred the Mindtree shares to L&T Infotech Ltd on 28.04.2019 and received around Rs 3200 Cr.

He repaid Rs 3000 cr loan, paid expenses related to transfer of 154 cr and the balance of Rs 46 cr was paid towards first instalment of AT of liability of Rs 300 cr