Officials of Price Waterhouse and Company were grilled for over nine hours by the Income Tax Department here in connection with the Nokia tax default case to the extent of nearly Rs 2,500 crore.

The Department is investigating the audit firm’s alleged involvement in the tax default by the Indian subsidiary of the Finnish telecom major.

A 20-member team of the Directorate General of Income Tax (investigation) questioned four officials from the Delhi branch of Price Waterhouse and Company the audit firm for Nokia.

The investigation began at 11 a.m. and went on past 8.30 p.m., according to department officials, who were tight-lipped on the interrogation. “We cannot comment on anything. The interrogation with Price Waterhouse officials is likely to continue tomorrow also,” said a senior Department official.

According to the Department, in the last six years, Nokia's Indian subsidiary has been downloading software from its parent firm in Finland to manufacture mobile handsets worth Rs 25,000 crore from the Sriperumbudur plant. Royalty is paid for this software, and this in turn attracts a 10 per cent tax deduction at source.

This is worth Rs 2,500 crore and not paid by Nokia, says the department. Meanwhile, Nokia officials could visit the IT office on Thursday for interrogation, department sources said.

(This article was published on January 16, 2013)
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