NewsCrompton Greaves Consumer Electricals Receives ₹42.61 Crore Income Tax Demand Notice for AY 2024-25Crompton Greaves Consumer Electricals Receives ₹42.61 Crore Income Tax Demand Notice for AY 2024-25
Crompton Greaves Consumer Electricals Limited received an income tax demand notice of ₹42,60,90,820 for AY 2024-25, comprising tax of ₹34,53,31,204 and interest of ₹8,07,59,616. The demand relates to disallowances of ESOP expenses, warranty provisions, depreciation on intangible assets, and payments to non-filers. The company expects a favourable outcome at appellate level and will file an appeal before NFAC, stating no material impact on operations or financials.
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Crompton Greaves Consumer Electricals Limited has disclosed receiving an income tax demand notice totaling ₹42,60,90,820 for Assessment Year 2024-25. The company received the notice on March 27, 2026, at 08:42 AM from the Assessment Unit, Income Tax Department, Mumbai, under section 156 of the Income Tax Act 1961.
Tax Demand Breakdown
The total demand comprises two components as detailed by the company in its regulatory filing:
| Component: | Amount (₹) |
|---|---|
| Tax: | 34,53,31,204 |
| Interest: | 8,07,59,616 |
| Total Demand: | 42,60,90,820 |
Reasons for Tax Demand
The Income Tax Department has raised the demand on account of several disallowances:
- Disallowance of Employee Stock Option Plan (ESOP) expenses
- Disallowance of claim of provisions against warranty and after sale service expenses
- Disallowance of depreciation on Intangible Assets
- Disallowance of payment to non-filers of Income tax Return
Company's Response and Next Steps
Based on the company's assessment, prevailing law, and consultant advice, Crompton Greaves Consumer Electricals reasonably expects a favourable outcome at the appellate level. The company has announced its intention to file an appeal before the National Faceless Appeal Centre (NFAC) within the timeline prescribed under section 249 of the Income Tax Act.
Financial Impact Assessment
| Parameter: | Details |
|---|---|
| Potential Impact: | ₹42,60,90,820 |
| Material Impact on Operations: | None |
| Impact on Financial Activities: | None |
The company has clarified that despite the substantial demand amount, there is no material impact expected on the financials, operations, or other activities of the company. This disclosure was made under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, ensuring transparency with stakeholders regarding significant regulatory developments.
Historical Stock Returns for Crompton Greaves
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +4.05% | -0.23% | -9.77% | -20.13% | -32.68% | -39.70% |
How might this tax dispute affect Crompton Greaves' ESOP policies and employee compensation strategies going forward?
Will this case set a precedent for how the Income Tax Department treats warranty provision claims across the consumer electricals sector?
What impact could a prolonged appellate process have on Crompton Greaves' cash flow management and working capital requirements?
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