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<b>Letters:</b> Taxing concerns

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Business Standard New Delhi

This refers to “Backward revisions in direct taxes come to haunt India Inc” (March13). The possibility of tax amendments (including those with retrospective effect) should be considered a common business risk. Further, its impact may never be significant if company managements follow prudent tax practices and make appropriate tax provisions.

It is common knowledge that many times tax advisors of companies ignore the legislative intent while making claims for deductions, and then persuade their client-companies to contest legitimate claims of the Income Tax Department.

If high courts, too, ignore the legislative intent and deliver judgments against the revenue, the only course left for the government is to bring in amendments. If one just peruses tax litigation in our country, one can come across hundreds of cases about definition of “income”, “agriculture” and so on.

 

It is time we learnt from such litigation and passed a tax code that would make those who file frivolous litigation pay a heavy price. If there is no unnecessary litigation, there would be no need for retrospective amendments.

Narendra M Apte, Pune

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First Published: Mar 18 2010 | 12:56 AM IST

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