Sujana says it inflated figures
Hyderabad
Sept. 1: The Sujana group companies — Sujana Metal Products Limited and Sujana Universal Limited — have admitted that they had presented boosted turnover figures to secure bank loans. This confession was made by the two public listed companies to strengthen their plea for exemption from paying tax on their second sales, which they said were merely “notional transactions”. The Sujana group is owned by Mr Y.S. Chowdary.
SMPL and SUL showed a turnover of about Rs 1,500 crore for the financial year 2004-2005. Now the group says these figures were boosted. In the three subsequent financial years the two companies showed a turnover of Rs 6,300 crore. When the tax authorities issued notices for payment of tax for these years, Sujana presented the same argument of notional transactions.
Inquiries by this correspondent revealed that the companies, in separate replies to the show-cause notices issued by the CTD, said: “We are constrained to admit that the purchases as well as our sales are notional and transacted for the purpose of securing book turnover for maintaining working results and to boost up the turnover of the company.”
They went on to add, “We are recording transactions of purchases and sales without actually receiving or dispatching goods.” When contacted, Sujana group said it had submitted replies to the show-cause notice. It, however, revealed only a portion of the content of the letter the full text of which is available with the newspaper.
Also, the SMPL director Mr S. Hanumantha Rao in an affidavit in the High Court (WP No 17663 of 2005) said “the transactions are nominal transactions without their (there) being a transfer of goods.” But the Sujana group said the observation was made in a different connotation to substantiate its stand with regard to levy of tax on second sales.
A confidential note circulated at the Regional Economic Intelligence Council in its meeting on August 17, 2009, mentioned the notional sales and boosting up of turnovers by the Sujana group companies.
