Shares of InterGlobe Aviation, the parent of top airline IndiGo inched up on Thursday after the firm said it would legally challenge a tax demand it received.
What Happened: The firm said it will contest tax demands exceeding ₹1,666 crore. The Commissioner of Income Tax-Appeals (CIT-Appeal) has issued orders that demand tax for the assessment years 2016-17 and 2017-18, the company said in an exchange filing.
In a regulatory filing, the company revealed that the Assessing Officer raised a demand of ₹739.7 crore and ₹927 crore for the respective assessment years, excluding interest and penalty. The company had appealed these demands before CIT-Appeal, and the respective orders have now been issued.
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Why It Matters: The orders confirm the revision to taxable income due to the tax treatment of certain incentives received by the company during the acquisition of aircraft and engines, along with the disallowance of specific expenses. This was done without affording an opportunity for a personal hearing and adjudicating on the merits of the matter, the company said.
InterGlobe Aviation said it would contest these decisions, asserting that it will pursue appropriate legal remedies. The company believes, based on legal advice, that the authorities’ views are not sustainable.
Price Action: InterGlobe Aviation’s share price was up 0.17% at the start of trade on Thursday.
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