KIMS Subsidiary Receives ₹306.97 Crore Income Tax Demand Notice

KIMS subsidiary faces ₹306.97 crore tax demand, but company says it's legally unsustainable and plans to appeal the assessment. The outcome could set a precedent for tax authorities' approach in the healthcare industry.

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KIMS Subsidiary Receives ₹306.97 Crore Income Tax Demand Notice

KIMS Subsidiary Receives ₹306.97 Crore Income Tax Demand Notice

Krishna Institute of Medical Sciences Ltd (KIMS) has disclosed that its subsidiary, SPANV Medisearch Lifesciences Private Ltd, has been served with a ₹306.97 crore income tax demand notice for the assessment year 2022-2023. The notice raised concerns about several financial transactions, including the receipt of share capital, share premium, and repayment of unsecured loans.

KIMS conducted an internal assessment and concluded that the demand notice is legally unsustainable and entirely defensible based on the facts. The company clarified that SPANV was not its subsidiary for the assessment year 2022-23. In response to the demand notice, SPANV intends to appeal against the assessment to the National Faceless Appeal Centre (NFAC).

KIMS, a healthcare company listed on the BSE and NSE , stated that the demand notice was issued by the income tax authorities under Section 156 of the Income Tax Act, 1961. However, the company did not provide details of the reasons behind the demand in the information shared.

The company has expressed confidence that the demand will not have a material impact on its operations or financial position. KIMS believes that the notice is legally unjustifiable and factually correct, and considers the financial impact to be insignificant.

Why this matters: The income tax demand notice received by KIMS' subsidiary highlights the scrutiny faced by companies regarding their financial transactions. The outcome of SPANV's appeal against the assessment could have implications for similar cases in the healthcare industry and set a precedent for tax authorities' approach towards such matters.

In a statement, KIMS said, "The company has internally assessed the situation and determined that the demand notice lacks legal basis and is entirely defensible." The company further added, "SPANV plans to challenge the assessment through an appeal at the National Faceless Appeal Centre." KIMS remains confident in its position and believes that the demand notice will not significantly impact its financial standing or operations.

Key Takeaways

  • KIMS subsidiary SPANV faces ₹306.97 cr income tax demand for FY 2022-23.
  • KIMS claims demand notice is legally unsustainable, SPANV to appeal at NFAC.
  • Demand notice cites concerns over share capital, premium, and loan repayment.
  • KIMS confident demand will not materially impact operations or financials.
  • Outcome of appeal could set precedent for tax authorities' approach in healthcare.