New Delhi: The income tax department has recorded the statement of the statutory auditor of Huawei Telecommunications (India) who purportedly submitted that the “raw ERP data dump” provided by the company to the department was “not sufficient” to audit its books.
According to court records ET has seen, the department claimed that the auditor’s statement buttressed its charge that the data dump from the ERP accounting system provided by the Indian unit of Chinese technology company Huawei was insufficient for the determination of its taxable income.
The tax department had accused the company of repatriating large amounts to the parent in the form of dividends, reducing its taxable income in India. As reported by ET this month, the department informed the Delhi High Court that Huawei Telecommunications had not produced its books of accounts “till date”, making it “impossible to ascertain the veracity of the income declared by the company”.
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It has claimed that the company’s statutory auditor had also submitted that the raw data dump supplied by the company had to be reconciled with the financials of the company.
The auditor has stated that the “completeness of the ERP also needs to be established by appropriate procedures”, the department said.
The tax department had recorded the auditor’s statement on May 23. It placed the statement on record before the Delhi High Court earlier this month.
To support its charge of “inadequacy of data dump” provided by Huawei, the department also claims to have recorded various statements during search operations at the company’s premises earlier this year and post-search enquiries.
It recorded the statement of the head of tax function-indirect tax and direct tax at the company, who according to the department, said it would take substantial amount of time to provide the details sought by the officials.
The executive, the department claims, had also stated that a “separate database is maintained for inventory, which was not part of the data dump provided to the department”.
It also recorded the statement of four other executives of Huawei India during the search operation in February. They were chief executive Li Xiongwei; senior manager (tax) and in-charge of transfer pricing issues; deputy chief financial officer and head of the legal department.
Agencies