Shares of Cipla Ltd fell to their fresh 52-week low today amid a media report that stated the Income Tax Department was investigating drugmaker Cipla on charges of tax violations and tax avoidance. The I-T department was investigating whether the company reportedly made wrong claims under Section 80 IA. Primary investigation has alleged wrong claims worth Rs 400 crore that were made under the section. However, no tax demand has been raised so far, stated a report in CNBC TV18.
Subsequently, shares of Cipla fell to a fresh 52-week low of Rs 853.5, falling up to 2.47 per cent on BSE. At 2:15 pm, Cipla shares were trading 0.03 per cent higher at Rs 875.40 against the previous close of Rs 875.15. The large cap share has lost 16.24 % in one year and fallen 18.59% since the beginning of this year.
Total 1.67 lakh shares of Cipla changed hands amounting to a turnover of Rs 14.69 crore on BSE. Market cap of the firm stood at Rs 70,520 crore.
The stock hit a 52-week high of Rs 1185 on November 1, 2022 and a 52-week low of Rs 853.50 on March 14, 2023.
In terms of technicals, the relative strength index (RSI) of Cipla stands at 19, signaling it’s strongly oversold. Cipla stock has a one-year beta of 0.9, indicating low volatility during the period. Cipla shares are trading lower than the 5-day, 20-day, 50-day, 100-day and 200-day moving averages.
тАЬThere is no claim or demand made on us. Cipla in an exchange notification on February 6 had shared that the company has fully cooperated with the IT Department in providing details and documents requested. Cipla continues to do so, on all items indicated by the I-T Dept,тАЭ said a Cipla spokesperson.
Section 80-IA provides for 100 per cent deduction on profit and gains derived from certain businesses for 10 consecutive assessment years in a block of 15 years.
According to CNBC TV18 that quoted sources on the matter, deductions worth Rs 1,300 crore were claimed for Research and Development. Section 35 of the I-T Act provides for deduction on expenditure incurred for scientific research and development and ranges from 100 to 150 per cent on certain cases.
As per the I-T department, tax avoidance was given as benefits to doctors and medical practitioners.
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