Wednesday, October 19 2005 18:27 Hrs (IST) - World Time -

Mumbai: The Bombay High Court today (Oct 18, 2005) stayed the order of Income Tax authorities attaching bank accounts of Coca-Cola for recovery of outstanding tax dues to the tune of Rs 77 crores for assessment year 2002-2003 and asked the soft drink major to deposit Rs ten crores towards the IT claim by the year end.

Hearing a petition filed by Coca-Cola, Justice V C Daga and justice J P Deodhar, allowed the soft drink major to deposit the amount in instalments by December.

The Income Tax authorities had claimed Rs 77 crores dues from Coca-Cola towards ads and promotional expenses incurred by the company during assessment year 2002-2003. The amount also included an interest amount of Rs 22.3 crore.

As the soft drink major failed to pay the amount, its accounts with Citibank, Bank of Maharashtra and ABN Amro Bank and ICICI bank were attached by the income tax authorities after the assessment officer rejected Coca-Cola's plea for a stay on recovery.

Coca-Cola also moved the Income Tax Tribunal seeking a stay and the matter is pending. As it attached bank accounts of the soft major, the company moved the high court seeking a stay on recovery procedures.

Coca-Cola counsel Soli Dastur argued that IT department had acted in haste while attaching the bank accounts instead of waiting for the Tribunal's order on the company's plea to stay the recovery.

Income Tax authorities today filed an affidavit in the court justifying recovery of dues saying that the company should first pay the amount and then seek remedy.

IT counsel Beni Chatterjee argued that the amount spent by the soft drink major on advertisement and promotional activities incurred by the company amounted to business expenditure which was taxable.