DCM Shriram Limited has disclosed a penalty order from the Income Tax Department, levying ₹1.59 crore. This penalty relates to the fiscal year 2021-22 (AY 2022-23) and stems from an addition made on account of the sale of buildings, which was treated as a capital asset. The company disputes the findings and is pursuing legal recourse, noting that the matter is currently under appeal before the ITAT.
Income Tax Penalty Order Issued
DCM Shriram Limited has received a penalty order from the Assessment Unit, Income Tax Department, dated 29th June 2026. The penalty, amounting to ₹1.59 crore, has been levied under Section 270A of the Income-tax Act, 1961, for the Financial Year 2021-22 (Assessment Year 2022-23).
Basis of Penalty
The penalty is in respect of an addition made based on an order dated 31st October 2025, passed under Section 143(3) read with Section 144B of the Act. In that order, the sale of buildings was treated as a capital asset, disregarding its depreciable nature. The Company has appealed this addition before the Hon’ble ITAT, Delhi, vide appeal number ITTPA No.35/DEL/2025.
Company’s Stance and Legal Action
The ITAT heard the matter on 26th May 2026, and the Order is currently awaited. DCM Shriram notes that the Assessment Unit proceeded to levy the penalty while the underlying addition is still under adjudication. The Company intends to take appropriate legal action against the penalty order, asserting that it lacks merit and is ignorant of the facts.
Financial Impact
The company states that there is no material impact financially, operationally, or otherwise on the Company, except to the extent of the penalty levied.
Source: BSE
