Tata Steel Wins ₹427 Crore Tax Relief, Exposure Drops To ₹1,259 Crore
Mumbai: Tata Steel has received a favourable order in a long-running income-tax dispute linked to interest expenditure on loans used for the acquisition of Corus Group Plc, providing relief of approximately Rs 427 crore for FY2009. The Income Tax Appellate Tribunal allowed the company’s claim for deduction of interest expenditure for FY2009, following an earlier favourable ruling for FY2008, Tata…
In a significant development for Tata Steel, the company has received a favorable ruling in an income-tax dispute connected to interest expenditure on loans utilized for the acquisition of Corus Group Plc. The Income Tax Appellate Tribunal has granted Tata Steel relief of approximately Rs 427 crore for the fiscal year 2009, bringing its aggregate tax exposure down from approximately Rs 1,686 crore to Rs 1,259 crore, pending a final decision by the Assessing Officer.
This relief is a result of the tribunal's allowance of the company's claim for interest expenditure deductions for both FY2008 and FY2009. The broader dispute revolves around the loans taken by Tata Steel for its acquisition of Corus Group Plc, with income-tax authorities disallowing interest deductions for FY2008 through FY2015.
The total tax exposure at stake in this case was around Rs 1,901 crore. Earlier this year, Tata Steel had already secured a favorable ruling for FY2008, reducing its tax exposure by approximately Rs 215 crore. This recent decision could potentially impact pending litigation concerning the same issue for FY2010 through FY2015, with the company planning to adjust contingent liabilities in its financial statements following the implementation of the FY2009 order.
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