The IT Department had carried out raids against the Chinese mobile phone brands and handset manufacturing firms.
The Central Board of Direct Taxes (CBDT) informed that two major companies have made remittances in the nature of royalty, to and on behalf of their group companies located abroad, which aggregates to more than Rs 5,500 crore.
According to the CBDT, the claim of such expenses does not seem to be appropriate. They are liable for a Rs 1,000 crore fine, as the companies had not complied with the regulatory mandate prescribed under the Income-tax Act, 1961, for disclosure of transactions with associated enterprises.
Various premises in the states of Karnataka, Tamil Nadu, Assam, West Bengal, Andhra Pradesh, Madhya Pradesh, Gujarat, Maharashtra, Bihar, Rajasthan, Delhi and NCR were raided during the searches.
The officials have alleged that during the searches, they learned about the alleged modus operandi of purchasing the components for the manufacturing of mobile handsets.
According to an ANI report, mobile manufacturer companies including Oppo, Xiaomi, and One Plus have been covered in the action. In the search operation, some fintech companies and their chief executive officers have also been covered.
