140 141
31.
Contingent liabilities (continued)
(c)
Value added tax on fit-out rental
VITP and CP had received demand notices from the Commercial Tax Department of Andhra Pradesh levying Value
Added Tax (“VAT”) on lease rentals attributable to fit-outs. VITP and CP had obtained opinion from an independent
legal counsel who is of the view that VITP and CP are not liable to pay VAT and accordingly appeals against such
demand notices have been filed. The potential tax exposure, attributable to such demand notices which are not
recognised in these financial statements, is estimated to be INR 54 million (equivalent to $1,202,000) for VITP and
INR 10 million (equivalent to $229,000) for CP.
(d)
Transfer pricing disputes
VITP and ITPL had received demand notices arising from differences in valuation of consideration paid for the buyback
of shares.
In VITP, the difference in buyback price and the fair value of the share as determined by the income tax department
was treated as an unsecured loan to the holding company and consequential tax was computed on the notional
interest income. The potential tax exposure attributable, not recognised in the financial statements is estimated to
be INR 11 million (equivalent to $232,000).
In ITPL, the difference in buyback price and the fair value of the share was treated as income of ITPL. The redemption
of preference shares is not an income bearing international transaction which affects the profitability of the ITPL
and does not have any income implications. Though no additional tax is demanded in the order, the order will have
an impact of reducing the recorded MAT credit entitlement and carried forward business loss by INR 111 million
(equivalent to $2,443,000).
32.
Authorisation of financial statements
These financial statements were authorised for issue in accordance with a resolution of the Board of Directors of the
Trustee-Manager, Ascendas Property Fund Trustee Pte. Ltd. on 29 April 2015.
