Unexplained Investments? Shri Renuka Sugars Slapped with Rs. 4.7 Cr Penalty

The company, Shree Renuka Sugars Limited, is engaged in the export of refined sugar from India. It has recently informed the stock exchanges, NSE and BSE, about the receipt of a penalty order of Rs 4,74,73,199, to the company, M/s. Monica Trading Private Limited which merged with Shri Renuka Sugar in December 2024. The penalty order dated June 24, 2025, was issued by the Income Tax Department under Section 271(1)(c) of the Income Tax Act, 1961. This disclosure was made in accordance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

As per the income tax department, the Company had made unexplained investments. However, the Company had recorded that the land was bought and an unsecured loan was availed by Monica from its parent company, Shree Renuka Sugars Limited, and that all this was properly recorded in the books with explanations.

The company filed an appeal against the tax demand of Rs. 7.01 over the unexplained investments. However, the company was penalised after its appeal was rejected by the ITAT.

The company has stated that the above order has no impact on the financial, operations or other activities of the company. Also, the company is planning to challenge the order by filing an appeal as it believes that it has strong merit in this case.