Swc Obtains Stay Against I-T Claim

Shaw Wallace & Co (SWC), recently saddled with an estimated Rs 179-crore liability from the income tax department, has obtained a stay order against the demand from the income tax appellate tribunal. The tax demand has been stayed till disposal of the appeal made by the company or till December 1998, whichever is earlier.

If the appeal is not disposed off earlier than the specified date, the stay order will be vacated immediately, point out sources. The tax demand is equivalent to 60 per cent of the total amount concealed, plus a surcharge.

According to guidelines laid down by the ministry of law, the tribunal could allow such a stay order in rare cases without going into the merit of the case. The first hearing of the case has been slated for mid-February.

 

SWC had, in the end of December 1997, appealed for stay of demand till disposal of appeals by the tribunal. The company had been slapped with charges for concealment of income amounting to a whopping Rs 298.4 crore at the end of a ten-year block assessment period 1986-96.

The order also includes appraisals made by the investigation wing of the department, pegged at Rs 80 crore, after nationwide searches on the premises of the company (offices and residences) on August 26, 1996.

The demand notice had been served to SWC at the end of November 1997 and the company had 30 days time for paying up or going in for an appeal. against the tax demand.

Relating to any pending case at the tribunal, law experts feel that possible verdicts that could be passed by the tribunal, could be

* Remand on particular points which could be forwarded for further enquiry by the assessing officer.

* Full relief.

* Partial relief.

* Setting aside of the entire assessment and calling for reassessment under guidelines laid down by the tribunal, especially the ones relating to evidences secured from third party.

A major chunk of the tax demand includes interest claimed by Shaw Wallace & Co on intercorporate deposits. The department disallowed interest claimed by the company on intercorporate deposits totalling approximately Rs 90 crore.

Besides, an estimated Rs 70 crore has also been disallowed on the basis of papers seized during an earlier raid by the IT department on the premises of K R Chhabria in 1995. Vital documents had been seized during the above raid.