Update on order received by the wholly owned subsidiary company - Rane Steering Systems Private Limited from Income Tax Appellate Tribunal, Chennai
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The Income Tax Appellate Tribunal (ITAT), Chennai has sent back (remanded) the tax appeal of Rane Holdings' wholly owned subsidiary Rane Steering Systems Private Limited (RSSL) to the Commissioner of Income Tax (Appeals) for fresh consideration. The original dispute relates to a tax demand of about Rs. 6.74 crore for Assessment Year 2015-16, where the tax department had disallowed certain revenue expenses under Section 37 of the Income Tax Act, treating them as capital expenditure. RSSL will now present its case again before CIT(A) with supporting documents to try and get the expenses allowed as deductions. No penalty or fine has been imposed at this stage, and the matter is still under adjudication.
The case is not yet decided either for or against the company — the ITAT has simply ordered a re-hearing, which gives RSSL another opportunity to argue its case. Shareholders should view this as a neutral procedural update; the potential liability of Rs. 6.74 crore remains pending and will only be clearer once CIT(A) gives a fresh ruling.