Aditya Birla Group Fined Rs 150 Crore Over October 2013 Cash Haul In Its Office

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NEW DELHI – The Aditya Birla Group continues to feel the reverberations of the controversial FIR registered in October 2013 over the allotment of a mine in Odisha to Hindalco, the group’s mining arm, in 2006. In the latest twist to a tax investigation stemming from the FIR, the Settlement Commission has directed Aditya Birla Management Corporation Limited (ABMCL), an arm of the metals-to-telecom group, to pay a penalty of Rs 150 crore. This includes tax, penalty and interest. The Settlement Commission is part of the government’s revenue department and is a platform to resolve tax disputes.

In October 2013, the income tax department had unearthed Rs 25 crore in cash at a corporate office of the Aditya Birla Group in New Delhi. The search by the tax authorities closely followed the first information report filed by CBI against Hindalco — the investigative agency had controversially named former coal secretary PC Parakh and Kumar Mangalam Birla, AB Group’s chairman, as accused — in the coal scam.

Tax department sleuths are said to have shown up at the premises of the Aditya Birla Group following a tip-off by the CBI’s search team.

Initially, the I-T department had asked Hindalco to account for the Rs 25 crore in cash. But upon discovering that the money was actually seized from the premises of ABMCL and not Hindalco, the investigation focused on the former, which is a group-level think tank.

“This is when a senior executive from the Aditya Birla Group came forward to claim that it was his money lying around in the ABMCL office while he was abroad and the search was conducted,” said a top tax official on condition of anonymity. But the tax department has refused to close the case merely on the basis of the executive’s statement.

A spokeswoman for the Aditya Birla Group declined comment, saying the matter was sub-judice. Sources in the Settlement Commission claim many questions remained unanswered.

“ABMCL approached the commission to close the tax case, but the explanation that the Rs 25 crore belonged to an executive does not hold ground,” said an official.

Elaborating on the affair, the official said even if the money belonged to an employee, someone has to pay tax on it. Also, questions are being raised why such a large sum of money was in the office and how the employee came to possess Rs 25 crore. So the Settlement Commission is not ready to relent and has directed ABMCL to pay the tax, penalty and interest on Rs 25 crore, all of which add up to Rs 150 crore