Hindalco dips 4% after court dismisses plea against tax dept

Hindalco Industries has plunged 4% to Rs 112, its lowest level since September 8, 2009, on the National Stock Exchange, after the Bombay High Court dismissed the company’s plea against the tax department over a tax outgo of nearly Rs 1,200 crore.

Hindalco has been an underperformer among Sensex stocks by declining 8.3% in past six trading sessions compared to 2.1% drop in the 30-share Sensex.

The Aditya Birla Group firm had challenged the income-tax department's contention that tax should be levied on corporate guarantees issued by the company.

“Hindalco has filed the petition on December 15, seeking immediate relief and quashing of the tax department order. The aluminum and copper giant was served with the draft transfer pricing order for 2008-09. The case relates to corporate guarantees issued by Hindalco to an SPV formed for the acquisition of the Canadian giant Novelis for $6 billion in 2007," the report suggests.

A combined around five million shares have changed hands on the counter so far on both the exchanges.