IndiGo's parent firm InterGlobe Aviation has said that it will challenge tax demands worth over Rs 1,666 crore, the PTI reported. According to the report, the Commissioner of Income Tax-Appeals (CIT-Appeal) has passed orders related to tax demands for the assessment years 2016-17 and 2017-18.
In a regulatory filing, IndiGo, the country's largest airline, said a demand of "Rs 7,396.76 million (AY2016-17) and Rs 9,270.31 Million (AY2017-18) was raised by the Assessing officer, against which the Company had preferred appeal before CIT-Appeal". The figures are excluding interest and penalty. The CIT-Appeal has passed the respective orders.
At 9:17 am, shares of InterGlobe Aviation were trading half a per cent lower at Rs 2,592.40 on the National Stock Exchange. The airline stock has gained 27 per cent this year, outperforming the benchmark Nifty50, which has jumped over 8 per cent during that period.
According to the regulatory filing, the revision to the taxable income on account of tax treatment of certain incentives received by the company from manufacturers with the acquisition of the aircraft and engine and disallowance of certain expenses has been confirmed without granting an opportunity of personal hearing and adjudicating the matter on merits.
The company will contest the same and will take appropriate legal remedies, it said. Further, InterGlobe Aviation said it believes, based on legal advice from counsel, that the views taken by authority are not sustainable.
As per news reports, this is the second time CIT-Appeals has confirmed tax demand on IndiGo. Earlier in 2015, the quasi-judicial appellate authority had asked the Central Board of Direct Taxes (CBDT) to look at treating discounts received by the airline on the purchase of aircraft as commission while computing their taxable income.
At 11.55 am on Thursday, stock of InterGlobe Aviation was trading at Rs 2,608.45 apiece, up 0.24 per cent on the BSE.