CAG raps I-T for irregular tax exemption to 2 Tata trusts

Written by PTI | New Delhi | Updated: Dec 14 2013, 09:06am hrs
The CAG on Friday pulled up the Income-Tax Department for allowing irregular tax exemption to two Tata trusts, involving over R1,000 crore.

"The IT department allowed irregular exemptions to Jamshetji Tata Trust and Navajbai Ratan Tata Trust who invested R3,139 crore in prohibited modes arising from accumulation of capital gains which involved tax effect of R1066.95 crore," said the CAG report tabled in Parliament.

The Comptroller and Auditor General (CAG) has noticed 14 Trust cases involving tax liability of R1090.03 crore, 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".