Nokia has been accused of violating income tax and transfer pricing laws of India. Nokia India has flatly denied these allegations and has been maintaining that it is complying with all the applicable laws of India.
In order to strengthen its allegations and prove its point, the income tax department officials paid a visit to Nokia India’s factory at Sriperumbudur, near Chennai, along with Central Forensic Science Laboratory (CFSL) officials from Hyderabad.
The idea was to verify and analyse Nokia India’s computers using cyber forensics methodologies that are suspected to be used for downloading software from parent company.
The verification started at 11:30 AM on Thursday and around 10-15 officials from the IT department along with two experts from the Central Forensic Science Labs were part of the verification, which lasted for almost seven hours.
The verification visit was triggered because during recording of statements in the last few weeks, Nokia officials gave different versions. The department sought a third party cyber expert to prove what Nokia did was wrong, and to strengthen the case, if it goes to a Court.
We at Perry4Law and Perry4Law’s Techno Legal Base (PTLB) believe that this is the right approach to gather digital evidence. The experience officials from the CFSL would consider all the aspects of cyber forensics, e-discovery, etc. Further, paper evidence scanning and e-discovery legal issues in India and optical character recognition (OCR) legal issues India should also be kept in mind by the CFSL officials.
The department is expected to raise demand anytime with Nokia for Rs 3,000 crore tax deducted at source (TDS) and if they don't compile with the law the department may consider freezing their bank accounts and their assets. The department is also alleging a transfer pricing violation of about Rs 10,000 crore.
According to the department, the Indian subsidiary of Finland-based handset manufacturer Nokia, has been downloading software from its parent company to manufacture mobile handsets at Sriperumbudur, near Chennai, but had not paid tax on royalty for downloading.