Shares of Hero MotoCorp surged nearly 2% following a favorable ruling from the Income Tax Appellate Tribunal (ITAT). The tribunal quashed an income tax demand of ₹2,336.71 crore for the assessment year 2011-12, bringing relief to the two-wheeler giant. As of 10:40 AM, the shares were trading 1.66% higher at ₹5,493.05 on the NSE.
The ITAT’s decision upheld Hero MotoCorp’s appeal against a reassessment order, ruling it invalid and rejecting the tax addition. This case dates back to the company’s joint venture with Honda, which was terminated in 2010 when Honda sold its 26% stake to the Hero Group. Hero MotoCorp acquired 5.19 crore equity shares, representing the 26% stake, from Honda at ₹739 per share in an off-market deal in March 2011, amounting to a total of ₹3,841.83 crore, on which the due tax was paid.
The ruling brings a significant relief to Hero MotoCorp, reinforcing investor confidence in the company’s stock.
