Bearings manufacturer Timken India Ltd on Tuesday (October 8) said it has received a demand order from the Income Tax Department, requiring an additional ₹100 crore in income adjustments for assessment year 2021-22.

The order, issued on October 7, 2024, stems from the department’s findings under sections 143(3), 144C(13), and 144B of the Income Tax Act, which cited discrepancies in the company’s arm’s length pricing methods related to its distribution segment. The assessment disallowed Timken’s approach, opting for alternative methods to determine the arm’s length price.

“(The) IT Department in relation to the transaction with associated enterprises regarding distribution segment of the Company inter alia disallowed methods considered by Company for arriving at arm’s length price and adopted other methods to decide arm’s length price,” Timken India said in a regulatory filing.

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Timken India anticipates an additional tax liability of approximately ₹25 crore plus interest. However, the company considers the order flawed and intends to appeal the decision. While Timken felt that this demand will not immediately impact its financial operations, it is taking steps to challenge the assessment with the goal of reducing or nullifying the liability.

“The company is of the opinion that the order passed by the IT Department is flawed and is taking necessary steps to file an appeal before the appropriate authority to get this order quashed or rectified. The company does not anticipate any immediate financial or monetary impact,” Timken India said.

Shares of Timken India Ltd ended at ₹3,594.30, down by ₹7.80, or 0.22%, on the BSE.

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