Mumbai based pharmaceutical giant Cipla came under the scanner of the income tax authorities on Thursday for alleged tax evasion. ET NOW was the first to report the development. "The investigative wing of the Mumbai income tax department has conducted extensive survey operations on the factories, units and official premises of Cipla. The probe will verify suspicions of certain non-permissible expenses," said an individual familiar with the development without elaborating further.
In response to a query from ET NOW, a Cipla spokesperson said, " The Income Tax Department has been present at few of Cipla's premises today to verify our records. Cipla strictly abides by the law and pays all taxes as required by all relevant central, state and local departments. We regard these visits as routine and as expected are cooperating fully with the officials."
"It will be interesting to see the outcome of the income tax department survey and whether this is a case where the interpretation of tax laws varies between Cipla and the revenue authorities," said a pharma analyst at a domestic brokerage on the condition of anonymity.
The Cipla stock was the top Nifty loser (down 1.3 per cent) on Thursday, a day when the Nifty touched record highs. The YK Hamied led company recently faced brokerage downgrades post its disappointing Q3 results.
Surveys are conducted under section 133 of the income tax act. They are carried out during business hours and cover only the business premises of companies under the scanner.