DLF may face tax liability of Rs 400 cr

The country's largest realty player, DLF, on Thursday said it might have to pay additional tax of up to Rs 400 crore (Rs 4 billion) following a special audit of its income for the fiscal 2005-06, by the income-tax authorities.

The I-T department had last year ordered a special audit of the 2005-06 financial year accounts of the realty firm.

"The Special (Audit) Report had recommended that the tax department (re)assess approximately Rs 1,200 crore (RS 12 billion) as additional income," the company said in a filing to the Bombay Stock Exchange.

DLF further said, the assessing officer had issued an assessment order on May 6 "adding substantially most of the amount suggested by the Special Audit Report".

"In an unlikely event if the said order is not reversed by the appellate authorities then it can result in a contingent liability of approximately Rs 300 crore to Rs 400 crore ," the company said.

DLF, however, said it "has got an expert opinion on the enhanced taxable income and is confident that this addition will not be sustained by the appellate authorities."

When contacted by PTI, DLF chief financial officer Ramesh Sanka said it would approach appellate authorities within 90 days.