• Notification Date: 15-03-2023
• Notification No: N/A

Income Tax Dept investigates Cipla on Charges of Tax Violations

The Income Tax Department is reportedly investigating drugmaker Cipla on charges of tax violations and tax avoidance. The I-T department is investigating whether the company reportedly made wrong claims under Section 80 IA. Primary investigation has alleged wrong claims worth Rs 400 crore that were made under the section. 

However, no tax demand has been raised so far, stated a report in CNBC TV18. The department had also carried out a survey action against the company on January 31. 

“There is no claim or demand made on us. Cipla in an exchange notification on February 6 had shared that the company has fully cooperated with the IT Department in providing details and documents requested. Cipla continues to do so, on all items indicated by the I-T Dept,” said a Cipla spokesperson. 

Section 80-IA provides for 100 per cent deduction on profit and gains derived from certain businesses for 10 consecutive assessment years in a block of 15 years. 

According to CNBC TV18 that quoted sources on the matter, deductions worth Rs 1,300 crore were claimed for Research and Development. Section 35 of the I-T Act provides for deduction on expenditure incurred for scientific research and development and ranges from 100 to 150 per cent on certain cases. 

As per the I-T department, tax avoidance was given as benefits to doctors and medical practitioners. 

Meanwhile, Cipla stock touched a 52-week low of Rs 853.5, falling 2.47 per cent on BSE. At 12:09 pm, Cipla shares were trading 0.22 per cent lower to Rs 873.20 against the previous close of Rs 875.15.