Income Tax Dept Investigates Cipla Over Tax Evasion Allegations
The IT Dept is investigating Cipla over potential tax violations & avoidance. Cipla made wrongful claims worth ₹400 crore & wrongful deductions worth ₹400 crore.
Due to claims that the international pharmaceutical corporation with headquarters in Mumbai, Cipla, has engaged in tax evasion and infractions, the income tax division has opened an investigation into Cipla. Yet, according to those with knowledge of the situation, the department has not yet issued any tax demands.
The Income Tax Authorities had conducted a survey action against the pharmaceutical giant Cipla earlier this year on January 31.
As part of the purported tax evasion inquiry, the government took unannounced steps to examine the company’s balance sheets and other financial records.
According to sources, the Income Tax Department is looking into whether the medicine maker has filed false claims under Section 80-IA.
According to preliminary research, the corporation submitted false claims under that section for 400 crore rupees.
For a period of ten consecutive years out of the 15 years from the date it began, Section 80IA permits a deduction of 100% of profits earned from businesses.
The corporation has allegedly made erroneous deductions totaling Rs 1,300 crore that were reported for research and development, in accordance with the Income Tax department’s accusations.
Section 35 of the Income Tax Act of 1961 specifies the range of 100 to 150 percent for the deduction that may be made for expenses incurred in scientific research and development.
The department further stated, according to additional sources, that tax avoidance on cash was provided as a bonus to physicians.
The price of Cipla shares has decreased 1.30 percent to Rs 873.85 as a result of news that the IT department is looking into the company’s potential tax evasion. The closing price of each Cipla share during the previous day’s trading session was Rs 875.15.