By: IPP Bureau
Last updated : April 07, 2025 12:24 pm
Dr Reddy’s said scheme of amalgamation was carried with adherence to all the legal requirements including tax laws
Dr Reddy’s Laboratories Ltd on Saturday said it has received a showcause notice from the income tax authority with a proposed demand of over Rs 2,395 crore related to the merger of Dr Reddy’s Holding Ltd (DRHL) with itself.
The company has received a show cause notice on April 4, 2025 of the Income-tax Act, 1961 Act to respond as to why notice should not be issued for assessment of income alleged to be escaped from tax consequent to the merger of Dr. Reddy’s Holding Limited (DRHL) into Dr. Reddy’s Laboratories Limited (DRL) under the scheme of amalgamation approved by the National Company Law Tribunal (NCLT), Hyderabad on 5th April 2022, the company said in a regulatory filing.
"The notice quantifies the proposed demand of Rs 23, 95, 81, 79, 470," the company said.
Dr Reddy’s said scheme of amalgamation was carried with adherence to all the legal requirements including tax laws. Further this was approved by the Honorable National Company Law Tribunal (NCLT), Hyderabad on 5th April 2022 with effect from the appointed date i.e. 01st April 2019.
The company strongly believes that there is no escapement of tax pursuant to the said merger scheme. Nonetheless, the company is reviewing the information and clarifications required in the Show cause notice and will respond, as required, appropriately, it added.
The said scheme also provides that the Promoters of the Company will jointly and severally indemnify, defend and hold harmless the Company, its directors, employees, officers, representatives, or any other person authorized by the Company (excluding the Promoters) for any liability, claim, or demand, which may devolve upon the Company on account of this amalgamation.