The Income Tax Department has filed an appeal against the order of the Income Tax Appellate Tribunal (ITAT) involving a disputed amount of Rs 10.87 crore with homegrown automaker Mahindra & Mahindra Ltd (M&M). In an exchange filing on Wednesday, the automaker disclosed that the appeal was lodged before the High Court of Judicature at Bombay for the assessment year (AY) 2016-17.
The appeal stems from a ruling by the ITAT, which had previously invalidated the Income Tax Department’s assessment and transfer pricing orders for AY 2016-17. The Tribunal had ruled the assessment as ‘bad in law’ due to the department exceeding the statutory time limits. In response, the Income Tax Department has questioned the legality of this ITAT decision, prompting the current legal proceedings.
In its filing, M&M said that the outcome of this litigation “is not reasonably expected to have any material financial impact on the company.”
“Whilst the outcome of this litigation is not reasonably expected to have any material financial impact on the company, an amount of Rs 100.63 crore is disclosed as contingent liability in the financial statements as of June 30, 2024,” the company added.
M&M profits rise 23 per cent in Q1FY25
Mahindra & Mahindra reported strong financial results for the quarter that ended on June 30, 2024. The company’s standalone net profit rose by 23 per cent, reaching Rs 2,613 crore, up from Rs 2,120 crore in the corresponding quarter of the previous year. This robust growth was largely driven by strong sales in its sport utility vehicle (SUV) segment and a rebound in tractor demand.
M&M’s car sales, primarily composed of SUVs, outperformed the market with a 24 per cent year-on-year increase. Meanwhile, after a 7 per cent decline in tractor sales during the last financial year, the first quarter of the current year saw a 5.6 per cent growth in this segment.
Despite these gains, the company’s profit for the latest quarter shows a 5.3 per cent decline when excluding the one-time gain from the sale of stakes in two units that had boosted last year’s profits.
First Published: Aug 28 2024 | 2:02 PM IST