Shree Cement, one of India’s leading cement manufacturers, has received a significant income tax demand of Rs. 588.65 crore for the financial year 2021-22. The tax demand was raised due to disallowed expenses claimed by the company in its income tax return. The company plans to contest the demand legally, citing clear errors in the assessment order. According to Shree Cement, the demand includes interest and is primarily due to disallowances made by the tax department during the assessment process.
The company received the final assessment order on May 27, 2025, under Section 143(3) of the Income Tax Act, 1961, from the Assistant Commissioner of Income Tax, Central Circle, Ajmer. This followed an earlier draft assessment order issued in April 2025. Shree Cement believes that once the errors in the order are corrected, the tax demand will decrease substantially. The company also expects that any remaining disputed amount will be adjusted against refunds it is yet to receive from the Income Tax Department, potentially eliminating the need for fresh payments.
Shree Cement is taking legal steps to address the tax demand, exploring all available options under the law to protect its interests. The company has consulted with legal experts and is confident that the development will not impact its financial position, business operations, or day-to-day activities. In similar cases, tax authorities and appellate bodies have passed favorable orders in the past, and the company expects a similar outcome this time.
It is worth noting that there are no penalties or sanctions mentioned in the order, and the company has not been accused of any wrongdoing. Shree Cement continues to comply with all legal and regulatory requirements. The company has informed investors and the public about the development through a regulatory filing, as part of its responsibility to keep stakeholders updated on important matters.
Overall, Shree Cement is confident in its ability to navigate the tax demand and minimize its impact on the company’s operations. With a strong track record of compliance and a history of favorable outcomes in similar cases, the company is well-positioned to address the tax demand and emerge with minimal disruption to its business.