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Informist, Monday, Sep 23, 2024

 

--HC junks HUL plea against 9.63-bln-rupee tax demand 

--HC asks HUL to move appellate tribunal against tax demand 

 

NEW DELHI – The Bombay High Court today rejected Hindustan Unilever Ltd's petition against an order passed by the Deputy Commissioner of Income Tax raising a demand for 9.63 bln rupees. The high court asked Hindustan Unilever to file an appeal with the Income Tax Appellate Tribunal within 15 days against the demand, along with a stay application.

 

The high court asked the Income Tax Department not to enforce the demand against Hindustan Unilever till appropriate orders are passed by the appellate tribunal on the stay application.

 

"We are not persuaded to accept the case of the petitioner that the present writ petition be made an exception and the same be entertained, by not relegating the petitioner to avail of alternate remedy of an appeal, as provided under the Income Tax Act," the high court said. 

 

The Income Tax Department had imposed the demand because Hindustan Unilever had not complied with the provisions of Section 195 of the Income Tax Act to deduct tax at source for the acquisition of Horlicks trademark registered in India.

 

Hindustan Unilever acquired the Horlicks brand in India from GlaxoSmithKline Plc in 2020.

 

The Deputy Commissioner of Income Tax passed an order in August holding that the purchase of the intellectual property Horlicks by Hindustan Unilever was the sale of an intellectual property (asset) situated in India and was liable to be taxed in capital gains.

 

Accordingly, a tax demand of 9.63 bln rupees was raised against Hindustan Unilever, payable by Sep 21. Furtherm the tax department issued a notice on Sep 4 to Hindustan Unilever initiating penalty proceedings for non-deduction of tax deducted at source.  

 

Today, the shares of Hindustan Unilever Ltd ended 1.7% higher at 3,028.55 rupees on the National Stock Exchange.  End  

 

Reported by Surya Tripathi

Edited by Saji George Titus

 

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