Munjal Auto Industries Ltd shares rallied nearly 9% to hit a fresh 52-week high after the company announced that it has received tax relief from the income tax department in a ₹401 crore demand order.

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In a stock exchange filing, the leading auto components manufacturer said the I-T Department has reduced the tax demand to ₹69.74 lakh against its earlier order of ₹401.42 crore, following its appeal to higher authorities.

After the disclosure, the stock jumped 9.14% to touch its 52-week high of ₹85.58 per share on BSE. Shares have surged 140% from the 52-week low hit on March 29, 2023.

The company clarified that it has always been disclosing to the stock exchanges all the material information that have a bearing on the operations or performance, including all necessary disclosures in line with SEBI rules within the stipulated time.

The exchanges had sought clarification from the company on the unusual spike in its shares in the last few days.

The stock has surged around 52% in the past month while in the last week it moved up 22%.

Munjal Auto in July had received a tax demand notice of ₹401.42 crore (₹4,01,42,70,150), including interest of ₹64.26 crore from the I-T Department for AY 2022-23.

The company in September filed an appeal before the deputy commissioner of the income tax, Vadodara, stating that income assessment was purely on account of a software processing error.

It also moved CPC Bengaluru and Central Board of Direct Taxes (Income Tax) against the tax demand notice.

“On application being filed to deputy commissioner of the income tax, Vadodara, company has received Rectification order u/s 154 of the Income Tax Act, 1961 for A.Y. 2022-23 on November 28, 2023,” the company said on Wednesday.

Munjal Auto also stated that the matter is under scrutiny assessment and it does not expect any financial implications.

The stock was trading 6.25% higher at Rs 83.3 apiece at 12.41pm on November 29, 2023.

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(Edited by : Shloka Badkar)

First Published:Nov 29, 2023 12:43 PM IST