Sapphire Foods subsidiary wins tax appeal in Sri Lanka

Sapphire Foods India Limited's wholly-owned Sri Lankan subsidiary, Gamma Pizzakraft Lanka (Private) Limited, has successfully appealed an income tax assessment. The Income Tax Department, Appeals (CIT(A)), issued an order on August 29, 2025, adjudicating the matter in favor of the appellant.

The initial assessment had ordered Gamma Lanka to pay INR 148.73 million in income tax, in addition to a penalty of INR 64.66 million. The CIT(A) ruled that the assessing officer's action in taxing the income under section 56(2)(viia) was unsustainable.

Consequently, the demand was deleted, and the penalty of INR 64.66 million was also deemed unsustainable and ordered to be removed. Sapphire Foods stated that this outcome has no impact on the financial, operational, or other activities of the company or its subsidiary.