KFA: I-T Dept may eye proceeds from non-core asset sale

I-T Department looks to recover the Kingfisher's tax dues from the money it raises by selling non-core assets. A notice to this effect has been served on KFA's main lender, SBI, reports CNBC-TV18's Sunanda Jayaseelan.

In the last week’s lenders meet, the bankers had nominated HDFC and JLL to value the properties. Once these were sold, banking sources have been telling us that they had decided that whatever recoveries were made would be distributed amongst the banks. CNBC-TV18 has picked up from income tax sources in Bangalore that they have sent a notice to SBI, the lead banker in this consortium, saying that once any recovery is made by sale of these assets, the first recovery should go towards the Income Tax Department. The notice has been served under Section 281 of the Income Tax Act stating that any payments made will have to be cleared by the assessing officer of the Income Tax Department. If it is not made, it will be treated as void. Basically, what this means is that whatever money is recovered, it will first have to go towards the clearance of the TDS dues, which is owed to the Income Tax Department by Kingfisher and only then will it be used towards any others.