JK Agri Genetics Limited Receives Tax Order, Plans Appeal Against Labour Expense Disallowance

JK Agri Genetics Limited Receives Tax Order, Plans Appeal Against Labour Expense Disallowance​

JK Agri Genetics Limited recently received an Order U/S 250 of the Income Tax Act, 1961, from the National Faceless Appeal Centre (NFAC), Delhi. This communication, received on April 17, 2026, from the Commissioner of Income Tax - Appeals Income Tax Department, concerns the company's Income Tax Return filed for the Financial Year 2017-18.

The order addresses ongoing assessments related to weighted deduction on Research and Development (R&D) expenses.

Review of Tax Assessment History​

The company had previously informed the Stock Exchange in August 2023 regarding earlier assessment proceedings. At that time, the Income Tax Department had passed a proceeding order in April 2021, disallowing expenses of ₹ 9.89 crore, which represented a weighted deduction of 150% under Section 35(2AB) of the IT Act, applied to R&D expenses totaling ₹ 6.59 crore. The resulting tax impact from this initial disallowance was ₹ 3.42 crore, attributed to the non-receipt of Form 3CL from the Department of Scientific and Industrial Research (DSIR).

The situation evolved subsequently. In April 2023, DSIR disallowed an amount of only ₹ 1.50 crore concerning outsourced labour expenses and filed the corresponding Form 3CL with the IT Department. At that time, the company noted that the impact of this disallowance was only ₹ 0.52 crore, which would be adjusted against existing MAT Credit, resulting in no anticipated cash outflow.

Current Order and Financial Implications​

The recent communication received on April 17, 2026, details the outcome after the company filed its grounds of appeal on April 6, 2026.

The order passed by the CIT (Appeals) disallows ₹ 1.50 crore of labour expenses, consistent with the Form 3CL issued by DSIR. Consequently, a demand amount of ₹ 0.52 crore (excluding applicable interest) needs to be paid by the Company. The financial impact remains mitigated, as this demand amount will be adjusted against the available MAT credit as of the respective date, ensuring no immediate cash outflow.

The company confirmed that there were no aberrations, penalties, or restrictions identified by the authority in the communication.

Company Action​

Regarding the order, JK Agri Genetics Limited announced that it is considering filing an Appeal against the Commissioner (Appeals)' Order before the ITAT. The company has a timeline of sixty (60) days from the receipt of the order to file this appeal.

Stock Price Movement​

On Friday, JK Agri Genetics Ltd shares settled at ₹353.50, marking a 1.01% gain for the day. Throughout the trading session, the shares fluctuated, finding themselves within a range between ₹340.00 and ₹360.00.

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