Income Tax Department has initiated survey action at the offices of FMCG company Marico. Following the news of this action, the company's shares saw a decline. The survey is conducted under Section 133A of the Income Tax Act to investigate potential tax evasion or concealment of income. The company has not yet issued an official statement.
IT Raid: On Wednesday, the Income Tax Department began survey proceedings at the offices of Marico, an FMCG company that manufactures products like Parachute, Saffola, and Livon. This action was taken as part of an investigation into potential tax evasion or concealment of income. Immediately after the news broke, the company's shares registered a decline of 1.20%. The company has not yet released any official statement regarding this development.
Survey Action on Marico
Marico Limited, the manufacturer of products such as Parachute, Saffola, and Livon, saw survey proceedings initiated by the Income Tax Department across its offices nationwide on Wednesday. During this action, officials began examining the company's documents and records. This move has caused a stir among the company and its investors.
The market reaction was swift. By around 11:41 AM on Wednesday, Marico's shares were trading at Rs 715.15 per share, marking a decline of 1.20%. This raised concerns among investors about the reasons behind the investigation into the company's financial affairs.
Reason for the Survey
This action by the Income Tax Department is not a raid but a "survey." It has been conducted under Section 133A of the Income Tax Act. The objective of a survey is typically to investigate potential tax evasion, concealment of income, or any discrepancies in financial records.
During a survey, officials examine the company's account books, bills, documents, and other essential records. If necessary, copies of documents can be made or they can be seized. However, the period for seizing documents cannot exceed 10 working days, unless permission is granted by higher authorities.
Company Statement
Marico Limited has not yet issued any official statement regarding this entire development. According to ET sources, this action has been taken with the aim of investigating the company's income and tax-related matters. However, the picture will become clearer as more information emerges.
Difference Between Survey and Raid
It is important to understand that there is a significant difference between a survey and a raid. A survey is a limited procedure that involves only collecting information, examining documents, and reviewing records. On the other hand, a raid is a more serious process that includes a thorough search of a house or office and may involve the seizure of documents as needed.
Experts state that a survey is a routine investigative process aimed at ensuring financial transparency. However, the market often reacts immediately as investor sentiment and concerns about the company's financial health rise.
Impact on Market and Investors
The fall in Marico's shares clearly demonstrates that actions by the Income Tax Department have an immediate impact on the stock market. Investors often become cautious upon receiving any news of financial uncertainty or investigation. This can lead to volatility in the company's share prices.
According to analysts, if no major irregularities are found during the investigation, the share price may return to normal levels. However, such news increases caution among investors, making them hesitant for short-term investments.
