Ponni Sugars (Erode) Limited Receives Order Regarding Transfer Pricing
Ponni Sugars (Erode) Limited announced on March 28, 2026, that it received an order from the Commissioner of Income Tax (Transfer Pricing) (CIT-TP) in Chennai on March 27, 2026. The order directs the Transfer Pricing Officer (TPO) to revise a previous order concerning Assessment Year 2021-22.The CIT-TP has set aside the determination of the Arm's Length Price (ALP) related to the inter-unit transfer of bagasse from the sugar unit to the co-generation unit, instructing the TPO to reassess and issue a revised order after applying the correct legal framework and providing an opportunity for the company to be heard.
Ponni Sugars (Erode) Limited maintains that its transfer pricing methodology is legally tenable and intends to challenge the CIT-TP’s order through appropriate legal channels. The company has previously received an order on January 28, 2026, from the TPO regarding adjustments for fuel cost and the sale price of power.
The company anticipates a material financial impact, though a precise quantification is not currently possible.
Details of the Order
The following table summarizes the details of the order:
| Particulars | Details |
|---|---|
| Authority | Commissioner of Income Tax (Transfer Pricing) (CIT-TP), Chennai |
| Nature of Action | CIT-TP directed the TPO to revise the order for AY 2021-22 concerning the ALP of bagasse transfer. |
| Date of Receipt | March 27, 2026 (order accessed March 28, 2026) |
| Alleged Violation | Incorrect transfer pricing methodology for bagasse and power. |
| Financial Implications | Multiple consequential impacts expected; precise quantification not possible at this time. |
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