Grasim Industries aims to initiate action against income tax department for demanding Rs 8,334 crore as capital gains tax on sale of shares in a group firm. Grasim Industries has accused the Deputy Commissioner of Income Tax (DCIT) of imposing a capital gain tax on the value of shares, without considering that the shares were issued to the shareholders pursuant to the scheme of arrangement and no consideration was received by the company which could be subjected to tax.

DCIT has raised a demand for the assessment year 2018-19 with regards to the company’s merger with Aditya Birla Nuvo and Aditya Birla Financial Services. The commissioner has valued the shares issued by the resulting company Aditya Birla Capital at Rs 24,037 crore as the sale consideration for transfer of undertaking and has made the addition of capital gains of Rs 22,772 crore to the income of the company as part of scrutiny assessment for the AY 2018-19. Earlier, the DCIT had sought dividend distribution tax for the same deal in 2019, which was stayed by the Bombay High Court.