The income tax department is investigating drugmaker Cipla over potential tax violations and tax avoidance, people familiar with the matter told CNBC-TV18. However, no tax demand has been raised so far, according to the source. Before this as well, the Income Tax Department had also carried out a survey against Cipla on January 31, 2023. In addition to this, the report mentions that the IT department is investigating the drugmaker to check if Cipla has allegedly made wrongful claims under Section 80-IA.
This is further being done as some investigations into Cipla have reportedly revealed that the company may have made wrongful claims worth Rs 400 crore. It must also be noted that IT Department officials are yet to confirm officially about this survey.
Under Section 80-IA of the IT Act profit and gains derived from specific businesses for 10 consecutive assessment years in a block of 15 years, only up to a certain period are eligible for 100 per cent deduction.
Additionally, the income tax departement has also alleged wrongful deductions worth Rs 1,300 crore claimed for Research and Development, according to the sources.
Section 35 of the IT Act provides for deduction on expenditure incurred for scientific Research & Development and ranges from 100-150 per cent on a case specific basis.
Sources have told CNBC-TV18 that the tax avoidance on funds was given as benefits to doctors and medical practitioners, the IT department has alleged.
In response to a CNBC-TV18 query, a Cipla spokesperson said, “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 IT Dept.”
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