Tuesday, April 24, 2007

Various : I-T swoops on art galleries in city, Delhi

Rennie Abraham
Tuesday, April 17, 2007 13:46 IST

MUMBAI: The income-tax department on Tuesday raided more than 35 official and residential premises of three art gallery owners in Mumbai to investigate price manipulation and tax evasion on expensive art purchases.

The premises of five art gallery owners in Delhi were also raided. The galleries also double up as auction houses.

Sakshi Arts, Osian’s and Saffron Art Gallery were the Mumbai-based firms covered in Tuesday’s operation. Sakshi Arts, which was scheduled to open a two-day preview of the works of artist Nalini Malini on Tuesday, cancelled the programme.

Its director, Geetha Mehra, said: “I-T officers are still conducting their investigation and I cannot comment at the moment. Could we speak about this on Wednesday?” Maniksha, a spokesperson for the gallery, confirmed that four I-T officers had reached the gallery since Tuesday morning but said she had been told not to receive any calls.

Neville Tuli of Osian’s said: “I am in New Delhi, down with chicken pox. You may reach my Mumbai offices for details.” But Preeti, a spokesman for Osian’s Mumbai office, said she was unable to provide any details of the raids.

Meenal Vazirani, director of Saffron Art Gallery, said: “I am just putting my daughter to bed. This is not a good time to talk. We’ll talk later.” Confirming the raids, a senior I-T officer told DNA: “We have been exploring the sudden and inexplicable price escalations of art works in recent times, especially in the wake of art funds with five-year tenure nearing maturity.”

He added: “We are also looking into possible price manipulations of art works and trying to find out whether art fund investors and those buying expensive paintings are paying taxes on their purchases.”

Press Trust of India
Tuesday, April 17, 2007 (New Delhi):

Income Tax department conducted raids at over 30 premises of eight art gallery owners in Delhi and Mumbai to unearth black money involved in transactions related to art pieces.

"On the basis of specific intelligence information, the department has conducted search operations at about 30 premises of eight art gallery owners and art fund organizers in Delhi and Mumbai," a senior income tax official said.

He said department had received information that substantial 'black money' was being invested by certain persons in expensive art pieces like paintings of eminent artists, resulting in huge tax evasion to the state exchequer.

In Delhi, he said,11 premises of four owners have been searched, while around 20 premises of other four persons were searched in Mumbai.

Although a number of fund organisers were attracting huge investments in art pieces, claiming to offer high returns, but these were not shown in tax returns.

"The pattern was similar to black money investment in real estate," the official said. "We have noticed some people are now buying art pieces at very high prices, but were showing lower value in account books to save tax and to convert black money into white," he added.

Declining to give names of art galleries and fund organisers that were raided, the official said the details about tax evasion would be declared once the investigations were complete.

Taxmen raid 25 art galleries in Delhi, Mumbai

[18 Apr, 2007 l 0246 hrs ISTlTIMES NEWS NETWORK]

NEW DELHI: Tax department officials have taken a fancy for art work. Income-Tax sleuths on Tuesday conducted searches on 25 premises belonging to eight entities that run art galleries and are in the business of financing art work.

Based on the information gathered over the past few months, the department on Tuesday conducted search and survey operations in Delhi and Mumbai.

The raids were carried out at 14 premises in Mumbai and 11 places in Delhi. While the details of recoveries were unavailable, sources said officials were also carrying out surveys on some additional premises to get details of inventories lying in godowns.

At the time of filing this report, the raids were still being conducted and nothing concrete had emerged as a large part of the deals were found to have been made in cash, sources said.

An official associated with the operation said it was difficult to evaluate actual deals since no registration process was followed by the galleries under scrutiny.

Officials found that many art galleries had not even registered themselves while they were engaged in striking deals.

"The raids were also aimed at understanding the trends and keeping an eye on some of the players in the sector,"a source said.

The I-T department believes that the galleries were resorting to large-scale under-invoicing, reporting lower value than what they earned through sale of art work, and did not show a large number of works in their inventories raising apprehensions that many transactions were not being reported to the taxmen.

Some of the art galleries and art fund organisers whose names were given by the tax officials, however, denied that raids had been conducted on their premises.

"Art is big business now though unorganised and many people who are the link between the artist and buyers are making a lot of money, a large part of which is not reported and is out of the tax net. We have information of some of these deals. We have come across cases where income generated through sale and exhibition of art work is not accounted for,"said an official.

Following a survey conducted on some of the leading art galleries across the country in 2005, an I-T investigation revealed that a leading south Delhi gallery owner had imported prints worth Rs 10 lakh from UK but had not disclosed it in the list of goods brought into the country.

While this was a case where the gallery owner was caught, officials said this was a common modus operandi in the art business.

Over the past few years, the government has been keeping track of art purchases also with a view to track down individuals who had large disposable income but were not paying taxes.

No comments: