CBDT: Income tax department scrutinising handful of M&A cases
December, 15th 2010
The Central Board of Direct Taxes (CBDT) today said that the income tax department is scrutinising a handful of cases relating to takeovers, mergers and acquisitions for any possible violation of tax law.
"The IT Department is currently scrutinising only a handful of cases relating to takeovers, mergers and acquisitions; not 380 or 100 as reported in some sections of media", the CBDT said in a press release.
The CBDT issued the clarification is response to a report which had said the department had scrutinised more than 380 merger and acquisition deals from 2007-08 and was expected to soon slap entities concerned with notices for tax totalling several crores of rupees.
Tax scrutiny is an ongoing process and the numbers vary from year to year, the CBDT said, adding only one per cent of the cases are scrutinised by the department and has not exceeded 1.5 per cent in the last decade.
Besides, some cases are scrutinised following intensive tax investigation such as surveys, search and seizure.
Mere incidence of takeover, merger and acquisition does not not qualify a case for tax-scrutiny.