Tax tribunal deletes ₹1 crore addition in Grovy India's FY21 assessment

Grovy India Limited has said that the Income Tax Appellate Tribunal (ITAT), Delhi bench, has deleted a ₹1 crore addition made against it for Assessment Year 2020-21. The addition was treated by the Assessing Officer as an unexplained cash credit under Section 68 of the Income Tax Act, 1961. The company said the tribunal's order is dated 9 October 2026 and that it received the order on 26 October 2026. The news was reported on 27 October 2026.

Section 68 lets the tax department add to a company's income any sum credited in its books for which the company cannot give a satisfactory explanation. To escape the addition, the company must prove the identity of the creditor, the creditor's capacity to lend or pay, and that the transaction is genuine. The company said the tribunal held that it had proved all three for the transactions in question.

What the order decides and what it leaves open

According to the company's account, the tribunal's decision settles the main Section 68 issue. Other points are still open. The company said the tribunal left two technical grounds undecided:

• Jurisdiction of the Assessing Officer under Section 148, the provision for reopening an assessment.
• The penalty under Section 271AAC(1), which relates to undisclosed income.

Interest under Sections 234B, 234C and 234D, which covers delay in advance tax and in filing returns, also needs to be recalculated. The company has not given a date for any further hearing, appeal or payment.

The company said that the total demand before the order was ₹119.24 lakh and that the order reduces it. It did not state the revised figure. Its earlier stock exchange filing of 27 February 2026 also referred to an ITAT appeal against a demand of the same size. The public filings do not make clear whether that appeal and the 9 October order concern the same proceeding.

What it means for buyers and shareholders

For buyers of Grovy India's projects, the company's statement is that the ruling does not change its day-to-day operations. The order is a tax matter between the company and the tax department. It does not change the terms of any sale agreement, and no buyer-facing obligation is mentioned in the company's account.

For shareholders, the company's account is that the demand has been reduced, and the report on the filing reads this as a relief from a specific contested tax liability. That reading is commentary and not a statement from the tribunal or the company. The remaining penalty and interest questions could still change the final amount payable.

The company is a developer working mainly in South Delhi and Lutyens Delhi. It holds a real estate division and a securities trading segment. Its revenue from the realty division rose to ₹33 crore in FY26, according to a financial data provider.

What happens next

The next step to watch is the tax department's response to the order, including any fresh assessment, penalty order or interest demand covering the open issues. Until those are issued, the company's total liability cannot be set out with confidence. The company is expected to disclose any further order or payment through its stock exchange filings.