Shares of InterGlobe Aviation rose as much as 2% to ₹2,938 apiece on the BSE today after the Income Tax Appellate Tribunal-Delhi (“ITAT”) granted interim relief to the company in connection with a tax assessment.
IndiGo’s parent company InterGlobe Aviation had received a tax demand notice of ₹1,666 crore from the CIT (Commissioner of Income Tax). The CIT appeal issued tax assessments amounting to ₹739.68 crore and ₹927.03 crore for the assessment years 2016-17 and 2017-18 respectively.
IndiGo today said the ITAT has granted “temporary relief” to the company. It directed the tax officer concerned not to take any “forceful action” to recover the disputed debts till the ITAT decides the appeals or six months, whichever is earlier.
According to its previous filing on the issue, the revised taxable income was confirmed without an opportunity for personal remuneration due to the tax treatment of the incentives the company received from the manufacturers with the purchase of the aircraft and the engine waiver of certain expenses and deciding on the matters in the matter.
IndiGo operator InterGlobe had reported a net profit of ₹188.9 crore for the July-September quarter of 2023-24, compared to a net loss of ₹1,583.3 crore in the same quarter last year.
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In the second quarter of FY24, considered to be the seasonally weakest quarter, IndiGo’s profit excluding foreign exchange losses was ₹806 crore. The company’s total revenue stood at ₹15,502.9 crore in the quarter ended September 2023, up 20.6% over the same period last year. Passenger ticket revenue stood at ₹13,069 crore, up 17.6%, and ancillary revenue rose 20.05% to ₹1,551 crore.
Following its second quarter results, Emkay Global had cut its FY24 earnings per share estimate for InterGlobe Aviation by 6 percent due to higher foreign exchange losses. However, the company remained positive on IndiGo due to strong ASK guidance, dominant position and robust order book, with some relief on fuel prices.
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A similar notice was sent to India’s largest passenger car manufacturer Maruti Suzuki India in October 2023. The company had received a draft tax assessment of Rs 2,159 crore for the financial year 2019-20 from the Income Tax Department. The company received the notification for the financial year 2019-20 proposing certain additions and deductions amounting to ₹2,159 crore in respect of the returned income (the income which the company declares in its income tax return).
Also Read: IndiGo’s parent company InterGlobe Aviation gets tax notice of ₹1,666 cr
Maruti Suzuki had also announced that it would submit its objections to the dispute resolution body.
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