Income tax department irregularly allowed deductions: CAG

The income tax department irregularly allowed deduction to assessees in 19 cases in eight states in respect of income earned through sale of carbon credit

GN Bureau | November 23, 2016


#carbon credit   #Income Tax department   #CAG   #infrastructure  


 The income tax department irregularly allowed deduction to assessees in 33 cases across 13 states in respect of infrastructure developed by joint venture formed by collaboration with foreign companies, undertakings owned by association of persons (AOPs), assessees who did not enter into agreement with the government, non-compliant industrial park and excluded works contractors. This resulted in underassessment of income involving tax effect of Rs 205.84 crore, observed the CAG.

 
The Comptroller and Auditor General (CAG) report on allowance of deduction to the assessees engaged in infrastructure development said that the ITD irregularly allowed deduction to assesses in 16 cases in eight states where the business of the assessees such as sale of plots, projects not covered under infrastructural facilities, conversion charges, development/maintenance of park etc, were not eligible for the deduction. This resulted in underassessment of income involving tax effect of Rs 174.35 crore.
 
The report also noted that the income tax department irregularly allowed deduction to assessees in 19 cases in eight states in respect of income earned through sale of carbon credit which involved tax effect of Rs 34.77 crore.
 
“The ITD irregularly considered additions made on account of treatment of expenditure as revenue, sale of fixed assets, disallowance made u/s 40A(3) 14A, 40(a) etc., for deduction in nine cases in five states. Consequently, the allowances were more than the amount claimed by the assessee involving consequential tax effect of Rs 74.66 crore.
 
“The ITD irregularly allowed deduction to assessees in eight cases in two states in respect of profits derived from ‘Railway Sidings/Jetties’ constructed and operated by the assessees for their private purposes, which did not qualify to be treated as infrastructure facilities in terms of Explanation to section 80 IA(4). Irregular allowance of deduction attracted tax effect of  Rs 2066.70 crore.”
 
The report went on to say that the ITD irregularly allowed deduction to assessees in six cases in four states for the period beyond the permissible limit of 10 consecutive assessment years, starting from the declared initial assessment year. Incorrect allowance of deductions resulted in underassessment of income involving tax effect of Rs 859.47 crore.
 
“The ITD irregularly allowed deduction to assessees in 15 cases in eight states where the assessee did not apportion the common expenses between eligible and non eligible units properly which resulted in excess allowance of deduction involving tax effect of Rs 224.47 crore.”
 
 

 

Comments

 

Other News

NTPC adds highest ever capacity; records highest single day generation

  With commissioning of 800 MW unit at Kudgi in Karnataka, 250 MW unit at Bongaigaon in Assam and 20 MW at Bhadla solar in Rajasthan, the total installed capacity of National Thermal Power Corporation (NTPC) group has reached to 49,943 MW.   The 12th plan cap

Why do we need Aadhaar?

 Aadhaar is arguably one of the most convoluted public policy interventions in India’s history. It has been more than eight years, yet there is little clarity on the exact purpose of the biometric-based unique identification project.  Let me take you through an event which I witne

AAI signs MoU with Daman and Diu admin for maintenance of Diu airport

The airports authority of India (AAI), a Miniratna PSU, has undertaken operation, development and maintenance of Diu airport from Diu administration.    A memorandum of understanding demonstrating the responsibilities was inked on March 20 between the union terri

PSU performance: Better than expected

Central public sector enterprises (CPSEs) have done quite well despite facing headwinds, according to the Public Enterprises Survey (2015-16) that was tabled in parliament on March 21. The net worth of all the CPSEs have gone up and the overall net profit has zoomed. Their contribution to the cen

National Health Policy: Old prescription, new date

After much discussion and pondering over for more than two years, the cabinet has approved a new National Health Policy, scrapping the old one which was formulated in 2002. The government aims to increase the public health expenditure to 2.5% of the GDP by 2025. The policy formulated in 2002 aimed

It’s traumatic, says African student

  “We have requested more security from the government of India and the Uttar Pradesh government,” said Abdou Ibrahim, senior adviser, Association of African Students (AASI)  following an attack on four students from Africa in Greater Noida, Uttar Pradesh. &n

Video

यूपी में नकल करने वालों की अब खैर नहीं

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter