The income tax department (I-T) has disallowed Sesa Goa tax deductions of Rs 246 crore on the basis of regular assessment conducted for financial year 2009 and 2010, reports CNBC-TV18’s Malvika Jain.
The income tax department (I-T) has disallowed Sesa Goa tax deductions of Rs 246 crore on the basis of regular assessment conducted for financial year 2009 and 2010, reports CNBC-TV18's Malvika Jain.
Why has the I-T dept disallowed tax deductions?
These tax deductions are related to three export oriented units set-up in 2000, 2003 and 2006. The I-T department believes that to be able to get a deduction under the IT Act the entire process in the production cycle has to be new. But in case of these three mines, while the benefication plants are new the mines are old, so no deduction can be given.
Sources indicate that certain accounts of the company had also been frozen, but no information is available as to when these accounts were frozen. However, the company seems to suggest that they have been de-frozen now.
Meanwhile, Sesa Goa has appealed against this regular assessment order. In view of that, the IT department is in the process of asking the company at this stage pay up only 50% of the disallowance that comes to around Rs 123 crore. Once the appeal is taken into consideration the final order will be passed.
What does it mean for the company?
The company has told CNBC-TV18 that this is routine matter. It does not see any financial impact and feels that at a later stage this deduction might be allowed. But for now Sesa Goa will have to pay Rs 123 crore to the I-T department.
