Max Estates Limited announced that its subsidiary, Max Square Limited, lost an appeal before the Income Tax Appellate Tribunal (ITAT) in New Delhi. The appeal challenged the order concerning the treatment of ₹63.77 lakh in interest income earned during the FY 2020-21 construction phase. The ITAT upheld the previous ruling, requiring the interest income to be taxed separately under ‘Income from Other Sources’ rather than being netted off against capitalized interest costs. The company is evaluating further legal recourse.
Update on Income Tax Appellate Tribunal Order
Max Estates Limited provided an update regarding the appeal filed by its subsidiary, Max Square Limited, concerning an assessment order from the National Faceless Appeal Centre. The update follows previous intimations made on June 5, 2025, and January 1, 2026.
The Income Tax Appellate Tribunal (ITAT), Delhi Bench, pronounced its order (ITA No. 4100/Del/2025 for AY 2021-22) on February 25, 2026. The order resulted in the dismissal of the appeal filed by Max Square Limited, thereby upholding the original order.
Details of the Tax Controversy
The core dispute involves interest income amounting to ₹63,77,502 earned during the FY 2020-21 construction phase of a project. This income had been netted off against the interest cost, which was already capitalized as part of the project cost from loans taken from Banks/Financial Institutions.
The tax authorities maintained the view that this specific interest income should be taxed separately under the head “Income from Other Sources,” a view now affirmed by the ITAT.
Impact Assessment and Next Steps
Max Estates Limited concluded, based on its evaluation, that there is no material impact on the Company’s overall financials, operations, or other activities resulting from this ruling.
The subsidiary is currently evaluating the possibility of pursuing further legal options, including filing an appeal before higher appellate authorities. The formal event occurrence was recorded on February 25, 2026, at 11:09 hours (IST).
Source: BSE
