Archive · 29 Sep 2026
Tata Steel Wins ₹427 Crore Tax Relief, Exposure Drops
Tata Steel had a disagreement with tax authorities over interest paid on loans used to buy Corus Group Plc.
The authorities had said the company could not deduct some of that interest from its taxable income.
A tribunal has now ruled in Tata Steel’s favour for the 2009 financial year.
This gives the company about ₹427 crore in tax relief.
Tata Steel’s possible tax bill could therefore fall from about ₹1,686 crore to ₹1,259 crore.
The reduction will happen after a tax officer issues a separate follow-up order.
Tata Steel had already won a similar ruling for the 2008 financial year.
The latest decision could also help its related cases for 2010 through 2015.
The company will update its reported contingent liability after the order is implemented.
The Income Tax Appellate Tribunal allowed Tata Steel’s FY2009 deduction claim for interest on loans used to acquire Corus Group Plc.
The ruling provides Tata Steel approximately ₹427 crore in tax relief.
The company’s aggregate tax exposure could fall from about ₹1,686 crore to ₹1,259 crore after implementation.
Tax authorities had previously disallowed Tata Steel’s ₹813.65 crore FY2009 interest deduction claim.
The FY2009 decision may influence pending disputes covering the same issue for FY2010 through FY2015.
- Who
- Tata Steel, the Income Tax Appellate Tribunal, and income-tax authorities.
- What
- The tribunal allowed Tata Steel’s FY2009 deduction claim for interest expenditure linked to loans used to acquire Corus Group Plc.
- When
- The dispute covers FY2009 and other financial years from FY2008 through FY2015; the FY2009 ruling was reported in the company’s latest exchange filing.
- Where
- The matter was reported through a Tata Steel exchange filing from Mumbai.
- Why
- The dispute concerns whether interest on acquisition-related loans could be deducted under Section 36(1)(iii) of the Income Tax Act.
Tata Steel
Income-Tax Authorities
Interest deduction
Tata Steel
Tata Steel argued that interest expenditure on loans used for the Corus acquisition should be deductible.
Income-Tax Authorities
Income-tax authorities disallowed the interest deductions under Section 36(1)(iii) for FY2008 through FY2015.
FY2009 claim
Tata Steel
Tata Steel challenged the January 2014 disallowance of its ₹813.65 crore FY2009 interest deduction claim.
Income-Tax Authorities
The Deputy Commissioner of Income Tax had disallowed the FY2009 deduction claim.
- FY2009 relief
- Approximately ₹427 crore
- Projected tax exposure
- About ₹1,259 crore after implementation, down from approximately ₹1,686 crore
- Original FY2009 deduction claim
- ₹813.65 crore
- Broader disputed exposure
- Approximately ₹1,901 crore for FY2008-FY2015
- Acquisition involved
- Corus Group Plc
- Earlier ruling
- FY2008 interest deduction allowed, involving approximately ₹215 crore in exposure
- Potential wider impact
- Persuasive impact on pending FY2010-FY2015 litigation