Himatsingka Seide Ltd: ₹6.9 Cr Tax Additions Deleted, Plans Supreme Court Appeal

Himatsingka Seide Limited has received a positive development in its income tax dispute, as the Income Tax Appellate Tribunal deleted ₹6.90 crore in transfer pricing adjustments for Assessment Year 2008-09. The company reported consolidated revenue of ₹1,401 crore for FY23.

What just happened

Himatsingka Seide Limited updated its status on the income tax litigation for Assessment Year 2008-09. The Income Tax Appellate Tribunal has removed ₹6.90 crore in additions tied to transfer pricing adjustments. Following a High Court ruling, the company intends to appeal the decision at the Supreme Court.

Why this matters

The deletion of ₹6.90 crore in tax additions offers relief to Himatsingka Seide. However, the planned Supreme Court appeal means the litigation is ongoing and may involve further legal costs and uncertainty.

The backstory

Himatsingka Seide has been involved in tax litigation concerning transfer pricing adjustments for Assessment Year 2008-09. The Income Tax Appellate Tribunal's decision provides relief on part of the disputed tax demand.

What changes now

• A reduction in potential tax liability by ₹6.90 crore has been secured.
• The company is advancing its legal case by preparing to appeal to the Supreme Court.
• The final financial impact hinges on the Supreme Court's ruling.

Risks to watch

• The planned Supreme Court appeal means legal proceedings are continuing, with potential for further costs.
• The final outcome of this appeal remains uncertain and could still affect the company's finances.

Peer comparison

The ₹6.90 crore tax adjustment is significant, but should be considered relative to the scale of operations at peer companies. For example, Welspun India Ltd reported FY23 revenues of approximately ₹8,465 crore, Trident Ltd had revenues around ₹6,578 crore, and Raymond Ltd posted revenues of about ₹8,240 crore in FY23.

Context metrics

• Himatsingka Seide reported consolidated revenue of ₹1,401 crore for FY23 and consolidated profit after tax of ₹37.3 crore.
• Standalone revenue was ₹305.6 crore for Q3 FY24, with profit after tax at ₹9.5 crore.

What to track next

• Himatsingka Seide's progress in filing the Supreme Court appeal.
• Any updates or timelines from the Supreme Court on the hearing.
• The eventual resolution and final financial impact of this tax issue.