Income Tax assessment order for AY 2023-24 with demand of Rs.3,82,08,430 received
The company received an Assessment Order with Computation Sheet and Demand Notice of Rs.3,82,08,430/- for Assessment Year 2023-24 on 25/09/2026.
By ScoutQuest · · 2 min read
- Tax Demand Notice
- Rs.3,82,08,430/-
- Addition to Taxable Income
- Rs.10,87,07,276/-
- Returned Income AY 2023-24
- Rs. 43,07,14,990
- Transfer Pricing Adjustment
- Rs.12,24,18,600/- (Trading Segment: Rs.4,81,11,500, Marketing Support Services: Rs.2,01,10,087, Royalty: Rs.4,25,73,062, Intra-Group…
- Penalty Proceedings
- u/s 270A to be separately initiated
What was received
The company informed BSE that on 25/09/2026 it received an Assessment Order under section 143(3) read with sections 144C(13) and 144B of the Income-tax Act 1961 for Assessment Year 2023-24, along with a Computation Sheet and a Demand Notice of Rs.3,82,08,430/- from the Assessment Unit, Income Tax Department. Penalty proceedings u/s 270A are to be separately initiated.
The addition to income
The order adds Rs.10,87,07,276/- to the taxable income for AY 2023-24, arising from transfer pricing (TP) adjustments in the Trading Segment, Marketing Support Services, Payment of Royalty and Intra-Group Services. The company had declared a returned income of Rs. 43,07,14,990 in its return shared on 28/11/2023.
Why the case was examined
The case was picked for Complete Scrutiny through the CASS system on flags including a mismatch in TDS disallowance u/s 40(a)(ia), identification as a high-risk Indian constituent entity of a multinational group under Country-by-Country Reporting, and large international transactions involving intangible property such as technical know-how fees and royalties.
Issues accepted without change
- The TDS disallowance mismatch was accepted: the company had already added back Rs. 29,57,010/- (30% of Rs. 98,56,700/-) in its return, and no further variation was proposed.
- Technical know-how fees of 7,09,55,103/- claimed as revenue expenditure were accepted, following an ITAT Delhi order in the company's own case for AY 2016-17.
Transfer pricing adjustments
The Transfer Pricing Officer's order dated 06/12/2025 proposed an upward adjustment of 12,24,18,600/-, split as:
- Trading Segment: 4,81,11,500 (Resale Price Method; median margin of 47% against the company's 37.10%)
- Marketing Support Services: 2,01,10,087
- Payment of Royalty: 4,25,73,062 (royalty benchmarked at 2% instead of the 5% claimed)
- Intra-Group Services: 1,16,23,951 (treated as Nil arm's length price for want of evidence of services received)
What happens next
The company has stated it will explore the options available to it and take appropriate action in accordance with the applicable provisions of the Income Tax Act 1961. The demand is a tax authority claim at this stage of the process, and the company's disclosure quantifies the monetary impact as the demand of Rs. 3,82,08,430/-.
More numbers
- Tax demand raisedRs.3,82,08,430/-
- Addition to taxable income AY 2023-24Rs.10,87,07,276/-
- Returned incomeRs. 43,07,14,990
- TPO proposed upward adjustment12,24,18,600/-
- TP adjustment - Trading Segment4,81,11,500
- TP adjustment - Marketing Support Services2,01,10,087
- TP adjustment - Payment of Royalty4,25,73,062
- TP adjustment - Intra-Group Services1,16,23,951
- Royalty rate benchmarked by TPO2%
- Royalty rate claimed by company5%
- Trading segment margin - company37.10%
- Technical know-how fees claimed7,09,55,103/-
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