Cipla Tax Demand: Income Tax Department issued a notice of Rs 773 crore to Cipla, the company said – will make a legal appeal

Cipla gets Rs 773 crore Tax Demand Notice from IT department :The Income Tax Department has handed over huge notices of Rs 773.44 crore to the country’s leading pharmaceutical company Cipla. These notices have been given to the company for the assessment years 2015-16 to 2022-23. Cipla has called this income tax demand from the Income Tax Department unreasonable and has said that it will legally appeal against it. The pharmaceutical company has given this information in a regulatory filing on Tuesday.

Expenses disallowed for tax deduction

Cipla has said in a regulatory filing that the Income Tax Department has issued it huge tax demand notices of Rs 773.44 crore from the Deputy Commissioner of Income Tax Department, Mumbai. These notices have been issued on July 12, 2024 after assessment and re-assessment, which the company received on July 15 and 16. According to the company, this additional demand for tax is related to disallowances of various expenses for tax deduction and also includes interest amount. This tax demand of Rs 773.44 crore does not include any refund applicable for the assessment years mentioned above (from 2015-16 to 2022-23).

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The company will challenge the order of tax demand

According to Cipla, it believes that this notice of the Income Tax Department is not legally sustainable. The company claims that it has sufficient factual and legal basis to support its claim, so it hopes that this order will not have any major impact on its financial position or operations. Cipla has said that the company will appeal against this order under all relevant laws. On Tuesday, the company’s shares closed at Rs 1,507.50, down by about half a percent (0.56%).

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What is the basis of tax demand

Short deduction under section 80IE has also been made the basis of the tax demand. Apart from this, the order also mentions the disallowance of some weighted deductions claimed under section 35(2AB) on the expenses incurred by the company for scientific research. Apart from this, approval has also been denied under section 37(1) for many such expenses, which the Income Tax Department has refused to accept as expenses incurred only for business purposes.