Leading pharmaceutical manufacturer Cipla Ltd received an additional tax demand of Rs.773.44 crore from the income tax department for assessment years 2015-16 to 2022-23, the drug maker said in a stock exchange filing on July 16.
The tax authority has asked for additional taxes, citing rule violations, including short deductions, weighted deductions, and disallowances of various expenses under the Income Tax Act Section 37(1).
A short deduction is a default that occurs when the tax actually deducted is less than the rate mentioned in the provisions. A weighted deduction is allowed for companies to invest in the development of knowledge and research capabilities in the country. Section 37(1) of the IT Act includes expenses incurred only for the company’s business operations.
The Rs.773.44 crore tax demand excludes any refund for the mentioned assessment years.
The pharma major stated in the stock filing that the demands by the income tax authority are not applicable under the law and the income tax notice will not impact the finances or the operations of the company. The company will appeal against the IT order under the applicable laws.
Read more at: Livemint
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