Income tax officials inspect books of Jet Airways in Mumbai, Delhi offices
The tax department is also examining the airline's deal with Godrej Buildcon where Jet is said to have received Rs 1,725 crore as a monetary consideration.
The Income Tax Department on Wednesday swooped down on the premises of Jet Airways in Mumbai and the national capital to carry out an inspection of the books of the crisis-ridden airline for alleged falsification of accounts and siphoning of funds through bogus expenses booked to group entities, according to official sources. As many as 50 tax officials are reported to have been pressed into action for the survey operation under Section 133A of the Income Tax Act at the Naresh Goyal-led airline's Andheri and Nariman Point offices in Mumbai to collect evidence related to financial irregularities. Two of the airline's offices in Delhi are also being covered in the survey which would continue for two days, officials said.
As part of the survey operation, tax officials only visit the business premises of a firm and check its books of accounts. Asked to comment on the issue, a Jet Airways spokesperson admitted to Mail Today that Income Tax officials were conducting a survey at the airline's office. Meanwhile, the tax department is also examining the airline's deal with Godrej Buildcon where Jet is said to have received Rs 1,725 crore as a monetary consideration.
Last month, the Corporate Affairs Ministry had also ordered an inspection of books and papers of Jet Airways. Jet Airways has run into financial problems and was forced to defer its quarterly financial results at the last minute due differences with its auditors, leading to queries by stock exchanges and capital markets regulator Sebi.
The auditors who had raised questions about the airline being able to continue as a going concern did not change their opinion and reiterated that the airline's future was dependent on raising capital and generating sustainable cash flows.
Jet Airways had reported a net loss of Rs 1,326 crore in the April-June quarter of 2018-19. The airline had said last month that it would seek capital infusion and sell its loyalty programme to raise resources. Jet Airways has a net debt of Rs 8,150 crore ($1.2 billion) as of end-March with the bulk of it being U.S. dollar denominated.
Airline profits in the Indian aviation market are taking a big hit due to rising fuel prices, a weaker rupee and a raging fare war in a fiercely competitive market. Jet Airways had run into turbulence with the airline's pilots going on the warpath in August as the top management wanted to slash salaries to tide over a lean financial phase. Jet Airways insiders said the management had told the staff that unless cost cutting measures are implemented, which include a reduction in salaries, the airline might be left with revenues only to operate for 60 days.
However, Jet Airways CEO Vinay Dube issued a statement saying reports about the sustainability of the airline were not only factually incorrect, but also malicious. The airline would also like to deny any conjecture of a stake sale.