‘Tata trusts given irregular tax exemptions’
14 Dec 2013 12:15 AM GMT
Government auditor CAG on Friday pulled up the Income Tax Department (ITD) for allowing irregular tax exemption to two Tata trusts involving tax implication of over Rs 1,000 crore.
‘ITD allowed irregular exemptions to Jamshetji Tata Trust and Navajbai Ratan Tata Trust who invested Rs 3,139 crore in prohibited modes arising from accumulation of capital gains which involved tax effect of Rs 1,066.95 crore,’ said the CAG report tabled in Parliament.
The Comptroller and Auditor General (CAG) has noticed 14 Trust cases involving tax liability of Rs 1090.03 crore, wherein accumulation arising from capital gains was either not invested in the specified mode or computed incorrectly.
Moreover, the CAG added, in some cases ‘they did not fully utilised ... proceeds for acquiring capital assets. The ITD allowed exemption irregularly in these assessments completed after scrutiny’.
Referring to a particular case, the auditor said Jamshetji Tata Trust and Navajbai Ratan Tata Trust earned Rs 1,905 crore and Rs 1234 crore on account of capital gains during assessment years 2008-09 and 2009-10, respectively and ‘invested the same in prohibited mode of investment which is in contravention to the provisions of section 13 (1) (d) of the Income Tax Act (dealing with investment)’.
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