Chambal Fertilisers Faces Rs. 96,86,205 Penalty for Income Tax Act Violations

Chambal Fertilisers & Chemicals Ltd. has been imposed a penalty of Rs. 96,86,205 by the Income Tax Department under Section 271(1)(c) of the Income Tax Act, 1961. The penalty is for alleged wrong claims of deductions in the income tax return for AY 2011-12. The two main issues pertain to the treatment of expenditure for constructing an anicut and the recognition of diminution in value of Fertilizer Bonds. The Company plans to challenge the order at an appropriate appellate forum.