Income Tax (I-T) Department issued fresh notice to realty major DLF

Oct 27, 2009

The Income Tax (I-T) Department has issued a fresh notice to
realty major DLF even as it’s appeal against an additional tax
liability imposed on it by the I-T Department is being heard.

The demand for additional tax payment first came after the
Institute of Chartered Accountants of India (ICAI),
which sets auditing standards, revised its accounting
norms during 2005-06.

The change had required real estate developers
and construction companies to change
from the conventional way of accounting to the new method
and incorporate the changes in their tax liabilities.

Pursuant to the change, a special audit conducted by the
I-T Department resulted in a demand for additional tax
payment from DLF based on its account books for the
financial year 2005-06. DLF appealed against the I-T Department’s
move and informed the stock exchanges that any adverse ruling
could result in an additionaltax liability of Rs 200-300 crore.

DLF has termed the fresh notice
from the I-T Department as a “routine follow-up”.

“This is a routine notice as a follow-up to last year.
The due legal process is on and our appeal on last year’s
assessment is sub judice in the I-T Department. DLF is sure
of its facts and figures, which will be duly considered in the appeal,”
a company spokesperson said.