Shalby Limited has informed stock exchanges about receiving an adverse order from the Income Tax Appellate Tribunal (ITAT) demanding Rs. 4.14 crore from the company. The healthcare provider disclosed this development under Regulation 30 of SEBI LODR regulations on April 11, 2026.

ITAT Order Details

The tribunal order was issued on March 16, 2026, and received by the company on April 10, 2026. The ITAT Ahmedabad Bench disallowed the company's appeal in a tax dispute case, resulting in the financial demand.

Background of the Dispute

The tax controversy stems from events prior to a demerger involving Shalby Surat Hospital Pvt. Ltd. (SSHPL). Before the demerger, SSHPL had issued unquoted shares at a premium based on book value as per a valuation report. However, the Assessing Officer disallowed this premium and added it to the company's income under Section 68 of the Income Tax Act.

The original assessment order was passed on December 28, 2017, under Section 143(3) of the Income Tax Act. The matter had been pending before the ITAT, which has now ruled against the company.

Company's Response and Financial Impact

Shalby Limited has indicated that there is currently no immediate implication on its financials. The company stated it has measures available to contest the order at appropriate forums, including further appeals within the ITAT framework.

The company expressed confidence in its position, stating it "reasonably expects the merits of case in our favour." This suggests Shalby Limited plans to pursue additional legal remedies to challenge the tribunal's decision.

Regulatory Compliance

The disclosure was made in compliance with SEBI regulations, specifically referencing SEBI Circular No. SEBI/HO/CFD/CFD-PoD-1/P/CIR/2023/123 dated July 13, 2023. The company provided comprehensive details about the order as required under the listing regulations, ensuring transparency with stakeholders about this significant legal development.

Shalby Limited has announced the issuance of a standby letter of credit worth up to USD 13.27 million through IndusInd Bank Limited. This financial instrument has been arranged specifically for Shalby Advanced Technologies, Inc., USA, which is the company's overseas step-down subsidiary focused on advanced medical technologies. The disclosure was made under Regulation 30 of SEBI Listing Obligations and Disclosure Requirements Regulations, 2015.

Transaction Details

The standby letter of credit arrangement involves comprehensive regulatory compliance and operational parameters:

Regulatory Compliance Framework

The company has fulfilled its disclosure obligations under SEBI Listing Regulations, providing detailed information as required under SEBI Circular No. SEBI/HO/CFD/CFD-PoD-1/P/CIR/2023/123. The transaction involves no promoter or promoter group interest, except for the step-down subsidiary being the beneficiary. This arrangement is structured to help the subsidiary obtain credit facilities while maintaining arm's length transaction principles.

Financial Impact Assessment

Shalby Limited has specifically stated that providing this standby letter of credit is in the overall interest of the company, as it will help the step-down subsidiary in obtaining credit facilities. The management has confirmed that no material financial or operational impact is foreseen from this arrangement, suggesting it serves as operational support rather than a significant capital commitment.

Strategic Implications

The issuance demonstrates Shalby's commitment to supporting its international subsidiary operations within a structured regulatory framework. This financial backing ensures adequate liquidity support for Shalby Advanced Technologies, Inc.'s operational requirements while maintaining transparency through proper regulatory disclosures. The arrangement reflects the company's strategy to strengthen its global healthcare technology operations while adhering to compliance requirements.