NSE/BSE Codes: NSE: TATASTEEL, BSE: 500470

Summary of Key Information:

Nature of Event / Disclosure:

Regulatory disclosure under SEBI LODR Regulations 30 and 51 regarding favorable outcome in material tax litigation for financial year 2008-2009.

Involved Parties / Authorities:

  • Income Tax Appellate Tribunal (Authority)
  • Deputy Commissioner of Income Tax, Circle 2(3)(1), Mumbai
  • Assessing Officer (to implement the order)

Date / Timeline of Event:

  • January 10, 2014: Original disallowance order issued by Deputy Commissioner of Income Tax
  • February 4, 2014: Company filed appeal with Income Tax Appellate Tribunal
  • June 2026: Final hearing conducted before the Authority
  • September 18, 2026: Favorable order dated (Order 2)
  • September 28, 2026: Company received the order
  • September 29, 2026: Disclosure filed with stock exchanges

Brief Description of Outcome / Dispute:

The income tax authorities had disallowed the company's claim of ₹813.65 crore towards deduction for interest expenditure under Section 36(1)(iii) of the Income Tax Act, 1961, in respect of loans borrowed and utilized for acquisition of Corus Group Plc. The Income Tax Appellate Tribunal has now allowed the claim following its earlier favorable order for FY2008.

Impact of Outcome:

Financial Impact:

  • The tax exposure for FY2009 is approximately ₹427 crore
  • Total tax exposure reduction from approximately ₹1,686 crore to ₹1,259 crore
  • The company will make necessary adjustments in its contingent liability reported in notes to its Financial Statements
  • No immediate cash outflow required

Operational / Business / Strategic Impact:

  • Positive resolution reduces uncertainty around long-standing tax litigation
  • The orders are expected to have persuasive impact on co-related pending litigations for the period FY2010 to FY2015
  • Strengthens the company's position in similar pending cases

Other Implications:

  • The favorable outcome supports the company's tax position and accounting treatment
  • Demonstrates successful defense of the company's tax planning strategies

Next Steps / Required Actions:

  • The Assessing Officer must give effect to Order 2 through a consequential separate order
  • The company will adjust its contingent liability in financial statements
  • The company will continue to pursue similar pending cases for FY2010-FY2015