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NOTE 18 - INCOME TAXES
 12 Months Ended
Mar. 31, 2012
Income Tax Disclosure [Text Block]
NOTE 18 – INCOME TAXES

Income tax expense (benefit) for each of the years ended March 31 consists of the following:

   
March 31,
 
   
2012
   
2011
 
             
Current:
           
Federal
 
$
-
   
$
- 
 
Foreign
   
(691,125)
     
(100,226
)
State
   
-
         
Net Current
   
(691,125)
     
(100,226
)
                 
Deferred:
               
Federal
   
-
     
4,242,001
 
Foreign
   
863,953
     
(422,823
)
State
   
-
     
381,433
 
Net Deferred
   
863,953
     
4,200,611
 
    Total tax provision
 
$
172,828
   
$
4,100,385
 

The significant components of deferred income tax expense (benefit) from operations before non-controlling interest for each of the years ended March 31 consist of the following:

   
March 31,
 
   
2012
   
2011
 
Deferred tax expense (benefit)
 
$
172,828
   
$
1,652,984
 
Net operating loss carry forward
   
2,717,569
     
2,003,420
 
Foreign Tax Credits
           
544,207
 
Interest income deferred for reporting purposes
               
Difference between accrual accounting for reporting purposes and cash accounting for tax purposes
               
    Less: Valuation Allowance
   
(2,717,569
)    
(4,200,611
)
Net deferred tax expense
 
$
172,828
   
$
0
 

The total tax provision for income taxes for year ended March 31, 2012 differs from that amount which would be computed by applying the U.S. Federal income tax rate to income before provision for income taxes as follows:

   
March 31,
 
   
2012
   
2011
 
Statutory Federal income tax rate
   
34.0
%
   
34.0
%
State tax benefit net of federal tax
   
-5.4
%
   
1.5
%
Change in valuation allowance
   
11.9
%
   
8.2
%
Loss on extinguishment of debt
           
-0.4
%
Deferred expenses from foreign acquisition
   
-3.7
%
   
-
 
Impairment loss on goodwill
   
-5.2
%
   
-11.9
%
Impairment loss on investments
   
-33.0
%
   
-4.4
%
Capitalized interest costs
   
3.6
%
   
-2.8
%
Effective income tax rate
   
2.2
%
   
24.2
%

The deferred tax assets and liabilities as of March 31 consist of the following tax effects relating to temporary differences and carry forwards:

   
March 31,
 
   
2012
   
2011
 
Current deferred tax liabilities (assets):
           
      Deferred Acquisition Costs – Foreign taxes
 
$
135,980
   
$
0
 
Valuation allowance
   
0
         
Net current deferred tax liabilities (assets)
   
135,980
     
0
 
                 
Noncurrent deferred tax assets (liabilities):
               
    Startup Costs
           
921,378
 
    Deferred Acquisition Costs- Foreign taxes
   
727,973
     
731,606
 
    Property, plant and equipment
               
    Foreign Tax Credits
           
544,207
 
    Net Operating Losses
   
2,717,569
     
2,003,420
 
Valuation allowance
   
(2,717,569
)
   
(4,200,611
)
Non-Current net deferred tax assets
 
$
727,973
   
$
0
 

Deferred income tax assets, net of valuation allowances are expected to be realized through future taxable income.  The valuation allowance increased in 2011 by $2.7 million, primarily related to 2011 net operating losses. The company intends to maintain valuation allowances for those deferred tax assets until there is sufficient evidence to support the reversal of the valuation allowance.  Deferred tax liabilities ($863 thousand) appeared on the acquired company’s books at the date of acquisition.  In order to present a conservative approach, we are carrying these estimated liabilities on our balance sheet.

The Company's and/or its subsidiaries’ ability to utilize their net operating loss carry forwards may be significantly limited by Section 382 of the Internal Revenue Code of 1986, as amended, if the Company or any of its subsidiaries undergoes an “ownership change” as a result of changes in the ownership of the Company's or its subsidiaries’ outstanding stock pursuant to the exercise of the warrants or otherwise. A corporation generally undergoes an “ownership change” when the ownership of its stock, by value, changes by more than 50 percentage points over any three-year testing period. In the event of an ownership change, Section 382 imposes an annual limitation on the amount of post-ownership change taxable income a corporation may offset with pre-ownership change net operating loss carry forwards and certain recognized built-in losses. As of March 31, 2012 IGC could not use its’ net operating losses because it is more likely it will not utilize net operating losses in the foreseeable future.