IT dept says ABG Shipyard defaulted Rs122 crore in taxes

The Mumbai Income Tax department said it has found undisclosed income of about Rs122 crore after a two-day search of the Mumbai, Dahej, Bhuj and Surat offices of ABG Shipyard Ltd earlier this week. “We have found undisclosed income of about Rs122 crore because of some discrepancy in the books of accounts of ABG Shipyard,” said a senior income tax official who declined to be identified.
In a statement to Bombay Stock Exchange (BSE), ABG Shipyard said that the Income Tax Department had conducted search operations at the premises of the company and officials of the company on 7-8 October, 2009. The search operations concluded on 8 October 2009.
However, it maintained that it is in compliance with tax laws. “The company believes that it has complied with income tax laws and that the income tax authorities have made no claims against the company pursuant to such search operations,” the statement said.
Dhananjay Datar, chief financial officer of the company said there is no demand from income tax department apart from the difference of around Rs100 crore in the land holdings of real estate subsidiaries. ”The company continues to be a tax compliant firm,” he said.
The shares of ABG Shipyard fell by 3.25% on BSE to close at Rs212.95 on Friday. The benchmark Sensex closed 1.19% lower, too, at 16,642.66 points.
ABG Shipyard, which is country’s largest private shipyard, is in a bidding war for a controlling stake in country’s largest offshore services firm Great Offshore Ltd. Bharati Shipyard Ltd, India’s second largest ship maker, is also in the race for Great Offshore and already holds 22.48% in that company, while ABG has a 8.29% stake.