Cipla receives ₹773 Crore demand notice from IT department

18 Jul 2024 , 10:35 AM

Cipla has received an additional tax demand of ₹773.44 Crore from the income tax department for the years 2015-16 to 2022-23, according to a stock exchange announcement issued on Tuesday.

The business stated that the additional demand of ₹773.44 Crore includes interest.

In assessment and reassessment orders dated July 12, 2024, the IT Authority raised additional tax demand on account of various disallowances, including short deduction under Section 80IE of the Act, weighted deduction under Section 35(2AB) of the Act, and disallowance of various expenditure under Section 37(1) of the Act, among others, Cipla said in a statement to stock exchanges.

Cipla stated that it believes the demands are “not tenable” under the law and intends to file appeals against the IT department order.

The company has appropriate factual and legal reasons to support its position and does not anticipate any major impact on the firm’s financial or operational activities as a result of the aforementioned ruling, it stated.

Additional demand was expressed for disallowances relating to the deduction of earnings and gains obtained from the business of constructing, maintaining, and running infrastructure facilities, as well as expenditures on R&D, commercial, or professional expenses.

On February 6, 2023, Cipla informed exchanges that I-T department officials had searched some of company offices and manufacturing units.

Cipla plans to release its quarterly results for Q1FY25 on July 26.

Cipla is a significant Indian pharmaceutical company with a global presence. It was founded in 1935 as Chemical Industrial & Pharmaceutical Laboratories Ltd and renamed to its current name in 1984. The company has a large portfolio, with over 1,500 products on the market.

At around 10.30 AM, Cipla was trading 0.10% lower at Rs 1,508.75 per piece, against the previous close of Rs 1,510.40 on NSE.

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