INSUBCONTINENT EXCLUSIVE:
MUMBAI:The Bombay High Court on Friday granted interim relief to Grasim Industries, the flagship company of the Aditya Birla Group, on a Rs
5,872-crore dividend distribution tax demand linked to a 2016 demerger plan of group businesses.
The revenue department had raised the
demand on Aditya Birla Capital (ABCL) shares that Grasim received after the demerger of Aditya Birla Capital from Aditya Birla Nuvo.
The
restructuring was part of a plan that involved the merger of Aditya Birla Nuvo with Grasim
However, after the merger, the financial services business of Aditya Birla Nuvo was demerged into Aditya Birla Capital
In 2017, the Ahmedabad bench of the National Company Law Tribunal (NCLT) approved the demerger.
“The company has, on March 15, received an
order issued by the deputy commissioner of Income Tax raising a demand of Rs 5,872.13 crore on account of Dividend Distribution Tax (DDT)
that includes interest,” argued a counsel representing Birla Group in the court
“The order is not as per income tax norms.”
The division bench of justice Akil Kureshi and justice SV Kotwal, while allowing an interim
stay, said the revenue department had raised a huge tax demand and directed the firm to deposit the amount without giving enough time to
file an appeal.
The court has asked the tax department to file its reply, adjourning the case to April 12.
An email query to Grasim remained
unanswered until the publication of this report
Atul K Jasani, an advocate representing the company, was also not available for his comments.
As per the 2016 restructuring plan, Aditya
Birla Nuvo investors got three shares of Grasim Industries for every 10 shares held
Grasim shareholders received seven shares of Aditya Birla Capital for every one held.
