Following the confirmation of tax claims of around Rs 1,666 crore by the Commissioner of Income Tax (CIT) Appeals, shares of Interglobe Aviation, the company that runs IndiGo airline, started slightly down on 23 November.
Orders for tax demands of Rs 927.03 crore and Rs 739.68 crore for the assessment years 2016–17 and 2017–18, respectively, were issued by the CIT–Appeal.
IndiGo has declared that it will challenge the directives and take the necessary legal action. The airline with the largest market share in India has alleged that the commissioner did not give it a chance for a face-to-face hearing and that the case was not decided on the basis of merit.
The Commissioner of Income Tax-Appeals has now confirmed tax demand on IndiGo for the second time, it was earlier done in the year 2015.
In 2015, the Central Board of Direct Taxes was requested to consider classifying discounts that Indian airlines received on aircraft purchases as commission when calculating their taxable income. The Commissioner of Income Tax (Appeals) is a quasi-judicial appeal authority.
Based on this opinion, the CIT had sent letters to InterGlobe Aviation in 2015, requesting that the Indigo Airlines operator explain why, for the assessment years 2008–11, its taxable income should not have increased by more than Rs 400 crore in order to account for the discounts it had obtained.
These reductions were declared by InterGlobe as capital receipts, which are free from income tax. However, the commissioner served the notices of augmentation after rejecting the plea.
During the previous session, the shares of IndiGo experienced a decline of approximately 1 percent and closed at Rs 2,602 on the National Stock Exchange.
Indigo's share were trading at Rs 2,608.10 at , an increase of Rs 3.75 which is a gain of 0.14 per cent.
