Max Estates’ Subsidiary Receives ₹21.13 Lakh Income Tax Demand

Max Estates' subsidiary, Max Square Limited, has received an income tax demand order of Rs. 21.13 lakh from the National Faceless Appeal Centre (NFAC). The demand pertains to the assessment year 2021-22 and arises from a dispute over the tax treatment of interest income earned on fixed deposits. Max Square had treated the interest earned from short-term fixed deposits of unutilized project funds as a capital receipt, to be offset against the project cost. However, the NFAC ruled that this interest should be taxed as "Income from Other Sources," leading to an addition of Rs. 63.77 lakh to the company's taxable income and the subsequent tax demand. Max Estates has stated that the demand is not material to its overall financials and does not impact its operations. The company is currently evaluating its legal options, which may include filing an appeal with a higher tax authority to challenge the NFAC's order.