Order passed by Assessment Unit, National Faceless Assessment Centre, Income Tax Department for AY 2023-24

The Income Tax Department's National Faceless Assessment Centre passed an assessment order dated March 27, 2026 against Rane (Madras) Limited for Assessment Year 2023-24 (FY 2022-23). While the authority accepted the company's explanation on the treatment of gains from derivative assets, it disallowed trademark fee expenditure of Rs. 10.37 crores paid to Rane Holdings Limited, treating it as capital expenditure. An upward adjustment of Rs. 2.60 crores was also made on Stand By Letter of Credit (SBLC) Commission. This results in a tax demand of Rs. 3.12 crores, excluding applicable penalty. Separately, penalty proceedings have been initiated under Section 274 read with Section 270A of the Income Tax Act. The company plans to contest the order before the appropriate appellate authority.