The Income Tax Department has filed an appeal against the Income Tax Appellate Tribunal's (ITAT) decision regarding a disputed amount of Rs 10.87 crore with homegrown automaker Mahindra & Mahindra Ltd (M&M). In an exchange filing on Wednesday, the automaker stated that the appeal was filed with the High Court of Judicature in Bombay for the assessment year (AY) 2016-17.
The appeal derives from an earlier verdict by the ITAT, which overturned the Income Tax Department's assessment and transfer price directives for fiscal year 2016-17. The Tribunal deemed the evaluation 'bad in law' because the department exceeded the stipulated time constraints. In response, the Income Tax Department has questioned the legitimacy of the ITAT ruling, resulting in the ongoing legal processes. In its statement, M&M stated that the outcome of the action "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 business wrote.
M&M profits jump 23% in Q1 FY25
Mahindra & Mahindra reported outstanding financial results for the quarter ending on June 30, 2024. The company's standalone net profit increased by 23% to Rs 2,613 crore, up from Rs 2,120 crore in the same quarter of the previous year. This significant gain was primarily driven by high sales in the sport utility vehicle (SUV) segment and a recovery in tractor demand.
M&M's car sales, which were mostly made up of SUVs, exceeded the market, increasing by 24 percent year on year. Meanwhile, tractor sales increased by 5.6% in the first quarter of the current fiscal year, following a 7% fall in the previous year. Despite these advances, the company's earnings for the most recent quarter fell 5.3% when the one-time gain from the sale of holdings in two units was excluded, which had increased previous year's profits.
