Firstcry’s parent company, Brainbees Solutions Limited, has received an income tax demand of ₹31.36 crore for the assessment year 2022-23. The demand arises from disallowances related to ESOP expenses and transfer pricing adjustments. The company intends to appeal the order before the Income Tax Appellate Tribunal (ITAT), asserting strong legal and factual grounds against the additions. The company maintains its commitment to high standards of compliance.
Income Tax Assessment for AY 2022-23
Brainbees Solutions Limited, the parent company of Firstcry, has been issued an assessment order and demand notice by the Income Tax Department on January 30, 2026, pertaining to the assessment year 2022-23. The total demand amounts to ₹31,36,30,330.
Key Issues and Disallowances
The income tax demand is primarily attributed to the following:
- Disallowance of ESOP (Employee Stock Option Plan) expenses: ₹82,73,04,280.
- Transfer pricing adjustments: ₹10,84,95,240.
Company’s Response and Planned Appeal
Firstcry believes it has strong legal and factual arguments against these additions. The company plans to file an appeal before the Income Tax Appellate Tribunal (ITAT). They emphasize that the allowability of ESOP expenses has been supported by judicial precedents and previously allowed by the Commissioner of Income Tax (Appeals) for AY 2015-16.
Impact on Operations
Except for the tax demand of ₹31.36 crore, the company states that the assessment order is not expected to have a material impact on its financial operations or other activities.
Source: BSE
