The Company has received the order from the office of the Commissioner of Income Tax (Appeals) under Section 250 of the Income Tax Act, 1961.
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Grovy India has received an order from the Commissioner of Income Tax (Appeals), Delhi, related to an assessment for Financial Year 2019-20 (AY 2020-21). The appellate authority upheld the Assessing Officer's order, which added ₹1 crore on account of unsecured loans, resulting in a total tax demand of ₹119.24 lakhs (₹78 lakhs in tax plus ₹41.24 lakhs in interest). The company disagrees with the order, believes it lacks legal justification, and plans to file a further appeal within the prescribed time limit. The management has stated that no material adverse impact on financials or operations is expected.
The ₹119.24 lakh demand is modest relative to a typical corporate balance sheet, and the company is confident of winning on further appeal, so the immediate impact on shareholders is likely limited. However, if future appeals also fail, the liability could crystallise and put some pressure on earnings.