Wrong profit calculation makes CITCO pay Rs 75 lakh advance tax
Careless functioning of its officials has once again cost CITCO dear. Its balance sheet has highlighted that the corporation deposited advance tax of Rs 75 lakh for the financial year of 2012-13 after anticipating annual profit of Rs 11 crore whereas it incurred a heavy loss of Rs 10 crore.chandigarh Updated: Oct 28, 2013 15:44 IST
Careless functioning of its officials has once again cost Chandigarh Industrial and Tourism Development Corporation (CITCO) dear. Due to erroneous estimation of anticipated profit, the corporation ended up depositing excess advance tax in the last financial year.
Taking a serious view of the shoddy working, DK Singla, a member of the board of directors of CITCO, who is a charted accountant by profession, in his comments on the balance sheet highlighted that the corporation deposited advance tax of Rs 75 lakh for the financial year of 2012-13 after anticipating annual profit of Rs 11 crore whereas it incurred a heavy loss of Rs 10 crore.
The balance sheet of the last financial year was presented in the board of directors meeting held on September 26 for approval. As per practice, around 25% of the anticipated annual profit is to be deposited in advance with the income tax department.
Not only this, Singla has also pointed out that the corporation failed to recover excess advance tax deposited in the past. A total of Rs 1.84 crore is pending with the income tax department for over eight years. The management has been advised for proper follow up for recovering the outstanding amount lying with the income tax department.
Criticising the functioning of the corporation, a senior official, requesting anonymity, termed the estimation of profit “surprising”, considering the fact that there has been a dip in earnings in the past few years. “There is a need to probe the matter as loss incurred during the period is almost equal to profit anticipated,” the official added.
According to sources, CITCO managing director Tanvi Garg has issued orders of inquiry into the matter and fixing the responsibility.
Despite attempts, Singla, Garg and chief general manager Amandeep Kaur were not available for comments.
For curtailing losses, which as per the report is highest in the past 15 years, an operational audit has been suggested to ascertain the reasons and to take corrective measure.
Singla has also highlighted the exorbitant increase in the tax audit fee. The tax audit fee has been increased to Rs 40,000, which is 53% more than the statutory audit fee against the industry norm of 20%.
Other irregularities pointed out by DK Singla, a member of the board of directors, include no follow up of outstanding long-term trade receivables amounting to Rs 48 lakh, and non-disposal of condemned consumable store cutlery amounting to Rs 2.19 lakh. Though decided, disclosures required under the Micro, Small and Medium Enterprises Development Act, 2006, and schedule VI of the Company Act are omitted and review of impairment of assets has not been done as required by the accounting standards issued by the Institute of Chartered Accountants of India.