The finance ministry today informed the Lok Sabha that it has received the report of a special audit of DLF Limiteds accounts for the assessment year 2006-07 and said it will take necessary action after scrutiny. The ministry was replying to a question whether housing companies had misled the Income Tax department regarding their income and profits. It said there were other housing finance companies too where special audits had been ordered, but did not name them.
A special audit under section 142(2A) of the I-T Act has been ordered in the case of Delhi Lease and Financing Ltd, also known as DLF, said minister of state for finance S S Palanimanickam. The audit report is being examined during the scrutiny proceedings, for taking necessary action. The details of the report and of other companies would be tabled in the House shortly.
When contacted, DLF acknowledged the audit but denied any auditing malpractice. The assessment is still to be done. It will be wrong to say that any action is being taken against DLF, said DLF Group executive director Rajeev Talwar.
The company said a switch to the percentage of completion method of accounting in FY 2005-06 from the Generally Accepted Accounting Principles method led to DLF recognising an additional profit of Rs 314 crore, resulting in taxable income of Rs 334 crore. DLF paid Rs 114 crore as tax on the same. DLF revised the accounting standards as prescribed by ICAI in FY 2005-06 because it had to go public, the company said in a statement.