New Delhi (Agencies): The Comptroller and Auditor General (CAG) has found discrepancies in Air India's accounts which show that the airline under-reported its losses in 2009-10 by over Rs 3,000 crore.
According to an interim report of the government audit body, the loss should have been Rs 8,589.1 crore, instead of Rs 5,551 crore as has been shown in the account books, sources said.
The national carrier, which is in the process of responding to the queries raised by CAG, has stated that the figure of losses was arrived at after accounting for deferred tax assets (DTA) of Rs 2842.52 crore and not showing Rs 195.58 crore as expenditure in the books as maintenance cost for leased planes.
DTA is an asset on a company's balance sheet that may be used to reduce income tax expense of any subsequent period.
For example, if a company has a DTA of USD 25,000 on its balance sheet and the company earns USD 75,000 before tax accounting income, accounting tax expense will be applied on USD 50,000 (that is USD 75,000 minus 25,000) instead of the total of USD 75,000.
"DTA is a standard accounting practice followed globally by all airlines. DTA has to be treated like expenditure for accounting purposes," an Air India spokesperson told the press.
"The DTA pertains to the year 2008-09 and was created last year on the grounds that Air India has a turnaround plan in place and it would be possible to adjust the tax benefit on the losses in the future years out of the profits available," he said.
Maintaining that there was "no understatement of loss" for the year 2009-10, the spokesperson said "DTA as a conservative measure was not created. If the same was created the losses would have been much lower".