JK Agri Genetics Draws A Line Under FY18 Tax Row With MAT-Backed Settlement

Nikunj Parikh - Mumbai Bureau Jun 01, 2026 1,350 Views

JK Agri Genetics has received a final tax assessment order from the Income Tax Department, crystallising a liability of ₹0.78 crore (₹7.8 million) relating to its FY2017-18 return. The demand arises from a partial disallowance of R&D-related expenses, but the company has neutralised the impact through available MAT credit, avoiding any cash outflow.

In an exchange filing, the company said the order was issued by the Deputy Commissioner of Income Tax, Circle 5(1), Kolkata, under Sections 250 and 143(3) of the Income Tax Act. The communication follows a multi-year assessment process and an appeal before the Commissioner of Income Tax (Appeals), which narrowed the disputed amount significantly.

Background To The Tax Assessment

Initially, the tax department had disallowed expenses of ₹9.89 crore by denying weighted deduction on R&D spend due to non-receipt of Form 3CL from the Department of Scientific and Industrial Research. Subsequent DSIR clearance restricted the disallowance to ₹1.5 crore, prompting JK Agri Genetics to pursue an appeal and engage with the authorities on the quantum.

Final Order And Financial Impact

Based on the appeal, the CIT (Appeals) upheld disallowance of ₹1.5 crore of labour expenses and corresponding weighted deduction of ₹0.75 crore, resulting in total tax liability of ₹0.78 crore. The company has accepted the order and adjusted the entire demand against existing MAT credit, confirming there is no penalty, sanction or cash outgo.

Key highlights

Final assessment order results in tax liability of ₹0.78 crore
Dispute stemmed from weighted deduction on R&D expenses for FY2017-18
CIT (Appeals) restricted disallowance to ₹1.5 crore of labour costs
Demand fully set off against MAT credit, with no cash outflow for the company
No penalties, restrictions or non-compliances reported; order accepted by management