Aditya Birla Group firm Grasim Industries said it received Rs 5,872.13 crore tax demand from the income tax department with respect to its merger with Aditya Birla Nuvo and Aditya Birla Financial Services Ltd. “The company has, on March 15, received an order dated March 14, issued by the Deputy Commissioner of Income Tax raising a demand of Rs 5,872.13 crore on account of dividend distribution tax (including interest),” Grasim Industries said in a regulatory filing. The Deputy Commissioner of Income Tax held that as the demerger of the demerged undertaking is not in compliance with Section 2(19 AA) of the (Income Tax) Act, the value of shares allotted by Aditya Birla Capital Ltd. to the shareholders of Grasim Industries, in consideration of the transfer and vesting of the demerged undertaking is not in compliance with Section 2(19 AA) of the (Income Tax) Act, the value of shares allotted by Aditya Birla Capital Ltd. to the shareholders of Grasim Industries, in consideration of the transfer and vesting of the demerged undertaking into Aditya Birla Capital, amounted to dividend, within the meaning of the Act, the filing said.
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