The Indian Income Tax Department (IT) has found examples of bloated expenses during the extraordinary audit of Jet Airways (JAI, Mumbai International) financial records, the ANI newswire has reported.
"We had found evidence of very high inflated expenditure bills during the survey. Jet Airways had shown too much expenditure while filling their returns to reduce the profitability of the company," a source privy to the investigation said.
The IT launched an audit on September 19, after weeks of reports about Jet Airways' poor financial situation. The direct trigger was the carrier's decision to defer the publication of its quarterly financial results in August for three weeks.
Following the initial findings, the taxmen will now analyse the airline's books further to verify whether it had purposefully falsified its expenditures to avoid tax and possibly syphon money out of the company.
"The company is fully cooperating with the authorities and is responding to the queries by the Income Tax authorities," Jet Airways said after the audit had been launched.
Indian media outlets reported in early August that Jet Airways was facing an imminent cash crisis and might become insolvent within 60 days. The carrier denied these allegations, although it later announced a INR20 billion rupee (USD285 million) cost-cutting drive. It also launched its largest-ever sale in order to improve the current cash flow. Jet Airways is also trying to sell its loyalty programme, Jet Privilege, and is reportedly negotiating wet-leasing its aircraft to Oman Air (WY, Muscat).
Between March and June 2018, the carrier lost INR13.3 billion (USD190 million) net. The carrier had a total debt of INR81.5 billion rupees (USD1.2 billion) as of March 31, 2018.
