The Supreme Court on Monday issued a notice to technology major Moser Baer India Ltd asking for its reply against the tax department’s demand that the company has income-tax liabilities worth Rs 2.97 crore. A Bench headed by Mr Justice S.H. Kapadia allowed four weeks for Moser Baer to file a counter-affidavit giving reasons why the Special Leave Petition (SLP) filed by the Income-Tax Department should not be entertained. The Department, that demanded Rs 2.97 crore as tax from Moser Baer India Ltd in 2003, had filed the SLP in the matter before the apex court after the Delhi High Court dismissed its appeal in September 2008.
COMPANY CLARIFIES
The case also generated some controversy on Monday after some reports that the tax department had demanded Rs 2,978 crore from the company as tax. Meanwhile, Moser Baer issued a statement clarifying that that Income Tax Department had demanded a tax of only Rs 2.97 crore and claimed that the reports were “completely erroneous and highly damaging for the company’s reputation.” It added that the tax liability has been “inflated a thousand times.” The Department had alleged that since a sizeable chunk of Moser Baer India’s turnover was made through transfer to its branches situated abroad and subsequent sale to third parties, the company had failed to comply with the requirement of export of more than 75 per cent of its turnover. According to the department, if the company had complied with this rule, it would have been eligible for income-tax exemptions. However, the company challenged the tax department’s order before the Commissioner of Income Tax (Appeals). The CIT (Appeals), in August 2003 had ruled in favour of the company. Moser Baer further said the Department’s appeal to Income Tax Appellate Tribunal and a subsequent appeal to Delhi High Court had been turned down in 2007 and 2008, respectively. –
Sources:www.thehindubusinessline.com
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