Star TV wants to settle it's tax claim, but the tax department has refused, reports CNBC-TV18. According to sources, Star TV has approached the Settlement Commission over a Rs 450-500 crore claim made by the I-T department.
But the department does not want to settle as it's confident of winning the case. After all, it had won the previous claim against Star. In 2006, the Income Tax Appellate Tribunal ruled in favour of the tax department. It held that Star Hong Kong had to pay over Rs 800 crore in tax on advertising airtime earned by telecasting in India.
The tax department has put in an additional claim of Rs 450-500 crore for revenue earned by Star thereafter. The department hopes for another victory - but Star wants to settle at the Settlement Commission.
The Settlement Commission rules permit a tax payer to apply only if the case is complex and if the tax payer declares some additional income than what he has before the income tax officer.
The IT department argues that there is no complexity in the case as the ITAT has already ruled in its favour in the previous case.
Sources said, the Income Tax Depatment may be worried that a negative ruling by the Settlement Commission could close all doors for it since the Commission's ruling is final and binding. And a negative ruling could cost the department hundreds of crore rupees.