Hero MotoCorp gets favourable verdict from Income Tax Appellate Tribunal for ₹2,336 tax demand

Hero Motocorp announced on Thursday that the company had received a favourable verdict from the Income Tax Appellate Tribunal (ITAT) for a tax demand of ₹2,336 crore. Following the announcement, shares of Hero Motocorp were trading higher by nearly 1% at ₹5,450 per share.

Hero Motocorp informed that it had filed an appeal against an income tax demand of ₹2,336 crore for the Assessment Year (AY) 2011-12. The demand arose from re-assessment. However, the company claimed that re-assessment had been done despite full disclosures being made during the original assessment.

As a result, the ITAT provided a verdict in favour of Hero Motocorp for the validity of the reassessment and Addition u/s 28(iv) of the Income Tax Act, 1961. Consequently, the tax demand for ₹2,336 crore has been quashed.

In June 2024, Hero Motocorp announced a 15% year-on-year (YoY) growth in sales to 5,03,448 units. The company’s domestic business saw a 16% YoY growth in sales to 4,91,416 units, while the export business saw sales decline by 15.48% YoY to 12,032 units. Additionally, the company saw the highest-ever dispatches of the VIDA V1 scooter during the month.

For the quarter ended June 30, 2024, the company recorded a 13.5% YoY jump in sales to 15.35 lakh units. Hero Motocorp also witnessed its global business sales surge by 44% YoY in Q1FY25 due to expansion of operations in Nepal, Colombia, Mexico, and Turkey. Meanwhile, domestic sales for the quarter climbed by 12.67% YoY to 14.84 lakh units.

Hero Motocorp also shared that the company has achieved the Zero-Waste-to-Landfill certification. The company said its overall generated waste by 40% to achieve the target before 2025. Further, the company is planning on expanding its EV portfolio during the fiscal year by introducing more mid- and mass-segment products. The company's shares have risen by nearly 32% since the beginning of the year, and the stock has gained over 73% in the past year.