Mukka Proteins gets partial tax relief, ₹7.55 cr rate dispute remains
Income Tax appellate order deletes ₹3.60 cr and ₹4.48 cr in additions but sustains ₹7.55 cr. The contested 78% vs 34.944% tax rate could determine the final hit.
— 3 earlier stories on Mukka Proteins Ltd. →What's new
- Tax appellate partly allows appeal, deleting ₹3.60 cr excess stock and ₹4.48 cr prior period income additions.
- Sustains ₹7.55 cr addition for excess stock; company had already paid tax at 34.944%.
- Dispute: whether the sustained amount is taxed at 78% special rate or normal rate; final impact depends on further steps.
Why this matters
The order removes some contingent liabilities but leaves a ₹7.55 cr exposure with a potential 78% tax rate. However, the incremental tax is modest relative to Mukka's ₹714 cr market cap, so the investment thesis remains intact.
What we're watching
- Whether the company appeals the sustained addition and the rate application.
- Any adjustments to tax provisions in upcoming quarterly results.
- Broader working capital cycle and credit rating, given prior CARE downgrade.
The full read
Mukka Proteins received a mixed tax appeal order for assessment year 2018-19. The Commissioner of Income Tax (Appeals) deleted additions of ₹3.60 crore for alleged excess stock and ₹4.48 crore for prior period income, but sustained ₹7.55 crore for excess stock. The dispute now centers on whether that ₹7.55 crore should be taxed at a punitive 78% under section 115BBE or the normal 34.944% the company already paid. The incremental tax, though uncertain, is modest relative to Mukka's ₹714 crore market cap and likely net worth. The company is evaluating its legal options. For now, the order removes some contingent liabilities but leaves a manageable uncertainty.
Questions answered
- What did the Income Tax appellate order decide for Mukka Proteins?
- The Commissioner of Income Tax (Appeals) partly allowed Mukka's appeal for AY 2018-19, deleting additions of ₹3.60 crore (excess stock) and ₹4.48 crore (prior period income), but sustaining ₹7.55 crore for excess stock. The sustained amount faces a disputed tax rate of 78% vs 34.944% already paid.
- What is the potential financial impact of the sustained addition?
- The incremental tax depends on the applicable rate: 78% under section 115BBE or the normal 34.944% already paid. The impact is modest relative to Mukka's ₹714 crore market cap, below materiality thresholds.
- Why was the prior period income addition deleted?
- The appellate authority accepted that the prior period income had already been taxed in earlier years, so adding it again would result in double taxation.
- What are the company's next steps regarding this tax order?
- Mukka is evaluating further legal steps. It may appeal the sustained addition or challenge the applicable tax rate at higher appellate forums.
- Does this tax order affect Mukka's financial statements immediately?
- Not immediately. The company has already paid tax at 34.944% on the sustained amount. Any incremental liability depends on the final outcome of the rate dispute, which could take years.
Mukka Proteins Ltd.
Latest quarter · Mar 2026
Strength & growth
Story so far
All notes on MUKKA →- 1 Jul 2026 · 5:13 PM IST Mukka Proteins gets partial tax relief, ₹7.55 cr rate dispute remains
- 24d ago Mukka Proteins raises ₹47 cr via warrants, buys two fish meal firms for ₹26 cr
- 27d ago Mukka Proteins board to meet on June 12 for equity fundraise after credit downgrade
- 41d ago CARE Ratings cuts Mukka Proteins' credit rating on liquidity stress