Media entrepreneur Raghav Bahl on Friday rejected the government’s claim that the Income Tax Department’s searches at his home and the Noida office of The Quint, the news website he founded just over three years ago, were part of a year-long investigation into alleged long-term capital gains. He warned news organisations to be vigilant against “state vendetta” and said Thursday’s searches indicate that there is “an imminent possibility that more such attempts shall be made now”.
The Income Tax department had on Thursday said the officials were “looking at a possible tax evasion of more than Rs 100 crore in the case of Mr Bahl himself on account of some long-term capital gains that have accrued to him through the sale of shares of a particular company”.
Bahl, however, said on Friday that “all these and other gains/losses were fully detailed/declared in the appropriate year of tax filing; and more importantly were accepted and assessed at tax, under this very government”.
“So the attempt to ‘colour’ our tax returns, now, as ‘bogus’, is clearly a frame-up, and we shall take every legal recourse to protect our fair name and reputation in this case,” Bahl said.
A long-term capital gain is the gain made from the sale of a capital asset that has been owned for longer than a year.
Bahl said the tax department raised questions about a joint venture between Viacom and TV18, an Indian entity belonging to Network18 Group that Bahl founded. “They [tax officials] seemed to imply it was done as a ‘round-tripping’ exercise,” Bahl said. “They also repeatedly confused this transaction with other subsidiaries/companies, including HomeShop18 and India Film Company. From memory, we did set the record straight, and asked them to reach out to Network18 for further details.”
Round-tripping is a strategy that businesses use to increase the apparent amount of revenue and sales of an asset by selling to another business with an agreement to buy it back in the future.
The entrepreneur said the investigators also raised questions about the joint venture between his company Quintillion Media – the holding company that owns The Quint – and Bloomberg. “They kept on insisting that we had got Rs 10 crore from Bloomberg invested in the JV [joint venture] without a formal FIPB [the erstwhile Foreign Investment Promotion Board] clearance,” he added. “In fact, at one stage, they even asserted this was a case of ‘round tripping’ again! But when we produced a copy of our FIPB approval for this investment by Bloomberg in Quintillion Business Media (P) Ltd (our JV company), I reckon they had little option other than to accept the fact.”
The entrepreneur claimed the tax department used private digital experts during the searches to clone data and carry out other digital surveillance. “So where is the privacy of this key data?” Bahl asked. “Who is responsible for its misuse? What indemnity do we have? This is an issue that requires serious deliberation and comment, and we reserve our right to take further action here. We will urge that this issue be taken up by privacy activists and concerned citizens.”
Bahl reiterated that his company had done nothing illegal. “In conclusion, we reiterate that we are absolutely in the clear, that we shall mount a robust legal defence against every trumped-up charge that is brought against us,” he said. “We are making these disclosures to preempt further character assassination against us, to thwart attempts through leaks, plants, and trolls; that we warn our fellow news colleagues to be vigilant against similar state vendetta.”