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Huawei now accuses the Income Tax Department! See what the problem is this time

The Income Tax Department accused Huawei of sending huge amounts of money even as its revenues fell. Here are the details.

After recent cases on Chinese smartphone brands like Xiaomi and Vivo, Huawei is now under the scanner. The income tax department has accused Huawei of sending large sums of money to its parent unit in China in the form of dividends, thus reducing its taxable income. The IT department claimed discrepancies in the income declared by Huawei, saying that “the company brought back Rs. 750 crore even when its revenue was dropping significantly”.

The tax department previously froze Huawei’s bank accounts after conducting an inspection at its headquarters and accusing it of tax evasion. Huawei denied any wrongdoing and told the court that linking the accounts without any notice affected its business. In response, the tax department called Huawei’s petition “a ploy raised on frivolous grounds simply to obstruct the administration’s actions and avoid paying consequential taxes.”

Huawei is now accused by the IT department

The tax department also claimed to have “incriminating materials” against the company. It also stated that the company had not produced its books of account “yet”, making it “impossible to ascertain whether the income reported by the company is correct”.

The department also said Huawei India had not given it access to the email of Yang Yi, the chief financial officer who was the decision-making authority on transfer pricing issues. She said it was necessary to examine the communications to fully understand the import of financial transactions and the reasons behind them. But the request was rejected on the grounds that the email might contain data unrelated to the company.

In other news, Xiaomi and Vivo were recently investigated by the ED for money laundering issues. Both companies have suggested otherwise and the same is currently being investigated.