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Kingfisher Airlines owes Rs 269 cr, I-T dept initiates proceedings

Kingfisher Airlines was found to have deducted tax at source on salary payments but had not deposited it in the government account, leading to procedures by the Income Tax department.

BT Online Bureau | May 18, 2012 | Updated 14:38 IST

Kingfisher Airlines, the Vijay Mallya-promoted carrier, owes Rs 269.06 crore as income tax. The Income Tax (I-T) Department has initiated penalty and prosecution proceedings against the private carrier.

Kingfisher Airlines was found to have deducted tax at source (TDS) on salary payments but had not deposited it in the government account, Minister of State for Finance S S Palanimanickam said in a written reply to the Lok Sabha on Friday.

"Survey was conducted at the business premises of the aforesaid company and subsequently tax demand (including interest) amounting to Rs 372.09 crore pertaining to FYs 2009-10 to 2011-12 were raised," he said.

FULL COVERAGE:Kingfisher crisis

"Action for recovering has been undertaken and a total of Rs 103.03 crore has already been recovered. Penalty and prosecution proceedings under the Income-tax Act have also been initiated," Palanimanickam said.

He said in case of Employees State Insurance Corporation, an amount of Rs 23.42 lakh is outstanding against the Bangalore unit of Kingfisher Airlines towards 'interest and damages', for which recovery action has been taken. The matter is pending in a court, he said.

The minister said proceedings under Employees' Provident Funds and Miscellaneous Provisions Act, 1952, have been initiated against Spice Jet Ltd for assessment of dues from November 2008 to January 2012.

To another question, Minister of State for Finance Namo Narain Meena said as on September, 2011, exposure of public sector banks to private airlines was Rs 15,700 crore.

"Out of this, about Rs 14,500 crore was outstanding," he said, adding banks obtain various tangible and intangible securities from borrowers. .

Meena said the Reserve Bank of India (RBI) has not issued any specific guidelines to banks for providing loan to private airline companies.

Credit related matters have been deregulated by RBI and banks are free to take their decision in the matters of loan eligibility based on their commercial judgement and in accordance with their policy framed within the overall framework of RBI, he added.

Shares of Kingfisher Airlines were up 2.78 per cent at Rs 12.95 on the Bombay Stock Exchange in afternoon trade.

With PTI inputs

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