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Grasim Industries, an Aditya Birla group company, plunged nearly 3 per cent intraday on Monday on the back of a ₹5,872-crore notice slapped on the company by the Income Tax Department.
The Deputy Commissioner of Income Tax had issued a show cause notice on February 11 and revised it on March 1 in case of equity share allotment by Aditya Birla Capital to the shareholders of Grasim Industries, pursuant to the Composite Scheme of Arrangement between Aditya Birla Nuvo, Grasim Industries and Aditya Birla Financial Services.
The Department has alleged that the demerger of the demerged undertaking (as defined in the Scheme) is not in compliance with Section 2(19AA) of the Act and raised a demand of ₹5,872.13 crore on account of Dividend Distribution Tax (including interest). The DCIT held that the value of shares allotted by Aditya Birla Capital to the shareholders of the company in consideration for transfer and vesting of the demerged undertaking into ABCL amounted to dividend, within the meaning of the Act, it said. The company said the aforesaid order is not tenable in law and necessary action against the order is being taken by the company.
The shares of the company closed at at ₹818, down 1.39 per cent, on the BSE.
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