Kaveri Seed Company Limited has informed the Exchange regarding 'Revised Disclosure of Information under Schedule III Para A of Part A and Regulation 30(13) of the SEBI (LODR) Regulations, 2015 read with SEBI Circular dated February 25, 2025 on ISF'.
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Awaiting price reaction for this filing.
Kaveri Seed received an order dated 27 March 2025 from the Office of the Assistant Commissioner of Income Tax, Hyderabad, passed under Section 143(3), disallowing Rs. 222.06 Crores of agriculture income that the company had claimed as exempt under Section 10(1). The department argues the income is from business, not agriculture. A demand notice for Rs. 69,58,75,410 (about Rs. 69.59 Crores) has been issued under Section 156. The company disagrees, believes it is entitled to the agriculture income exemption, and plans to appeal. Management has stated there is no material impact on financial, operational, or other activities.
Shareholders should watch the Rs. 69.59 Crore tax demand, but the company is actively contesting it through appeal, so no immediate cash outflow is expected. Adverse outcome in the appeal could lead to a material hit, while a favourable ruling would remove the overhang. Near-term sentiment may be mildly negative given the large disallowance, though the company's 'no material impact' stance provides some comfort.