JPC chief doubts CAG figure

Does income-tax law say anything about presumptive losses? Chako writes to CBDT

GN Bureau | December 1, 2011



The joint parliamentary committee (JPC) has been cross-checking the CAG estimate of the presumptive loss of Rs 1.76 lakh crore in the 2G spectrum scam of January 2008.

Comptroller and Auditor General (CAG) Vinod Rai claimed before the JPC that the figure was calculated on the basis of the Income Tax Act. But JPC chairman PC Chako, a Congress MP, says he checked the IT law and also consulted some chartered accountants and found that there was no provision in the Act to calculate the presumptive or notional loss as stated by the CAG.

He has now written to the central board of direct taxes (CBDT) to clarify if the IT Act or the proposed direct taxes code speaks of any such thing as the calculation of the presumptive loss. "I have asked them if any methodology of calculating notional loss as argued by the CAG existed, We will take their opinion on board before arriving at a conclusion," Chako.

The CAG may also be confronted with the CBDT opinion at the next JPC hearing on December 19. A day after then telecom audit director general R P Singh had dubbed the notional loss of Rs 1.76 lakh crore as a "mathematical guess," the CAG had defended the figure before the JPC, saying he had followed the concept as contained in the IT Act which provided for the calculation of presumptive loss. He even asserted that the direct taxes code also talks of presumptive loss.

 

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