Income Tax Tribunal denied Tax Demand of Rs.2337 Crore against Hero MotoCorp
Hero MotoCorp, India’s largest two-wheeler manufacturer recently received good news. The Income Tax Appellate Tribunal (ITAT) cancelled Rs.2,336.71 crore tax demand against the company for the assessment year 2011-12. Hero MotoCorp had appealed against this tax demand which was based on re-assessment proceedings.
The company argued that re-assessment was unnecessary since they had already made full disclosure during an original assessment. The ITAT ruled in favour of Hero MotoCorp in their appeal. It addressed two main issues: the validity of the re-assessment and the addition under section 28(iv) of the Income Tax Act, 1961. As a result, the entire tax demand was quashed.
Following this decision, Hero MotoCorp’s shares rose by 2.6%. They reached a high of Rs.5545 on the Bombay Stock Exchange (BSE). This positive outcome for Hero MotoCorp comes just one day after the Delhi High Court cancelled a summon issued against the company’s executive chairman, Pawan Kant Munjal in a case involving the Directorate of Revenue Intelligence (DRI) related to foreign currency.
Hero MotoCorp, a 40-year-old company operating in 48 countries, recently released its annual report. In it, Munjal highlighted the company’s efforts to expand its product lineup with premium motorcycles. Models like the Harley-Davidson X440, iconic Karizma XMR and Maverick 440. These new models aim to reshape the automotive market and support India’s growing aspirations.
The company also owns over 40% of electric scooter startup Ather Energy. In the financial year 2023-24, Ather Energy’s loss attributable to Hero MotoCorp was Rs.389.77 crore. Despite this, Ather remains one of India’s top electric scooter makers. Selling 6104 units in June compared to 6,045 units in May.
Hero MotoCorp’s electric vehicle (EV) brand VIDA, has partnered with Ather Energy to create India’s largest public charging infrastructure for two-wheeler EVs. This collaboration provides nearly 2000 fast-charging points across 200 cities in India. Allowing EV users to use both VIDA and Ather charging grids.
Munjal also mentioned that their partnership with Zero Motorcycle would help develop new EV motorcycles for specific customer segments, thereby expanding the market.
In June Hero MotoCorp sold 3069 electric two-wheelers under its Vida brand. This marked an increase from 2,456 units in May. The company aims to make significant strides in the EV market. It plans to launch new products both in the mid and affordable segments over the next year. Furthermore, Hero MotoCorp has expanded its Vida brand into 100 cities across India.
