Sapphire Foods India Limited has successfully won an appeal at the Income Tax Appellate Tribunal (ITAT), Mumbai, regarding a tax interest dispute. On November 7, 2025, the ITAT ruled in favor of Sapphire Foods, determining that the interest under Section 201(1A) of the Income Tax Act, 1961, should be limited to the date of actual tax payment. This decision marks a significant victory for the company, as it clarifies the applicability of tax interest and may have implications for future tax obligations.

The ITAT's ruling not only favored Sapphire Foods but also highlighted procedural lapses by revenue authorities. The tribunal noted that there had been no factual verification regarding the deduction of Tax Deducted at Source (TDS) in the subsequent financial year. As a result, the case has been remanded to the Assessing Officer for a limited verification to ascertain whether the tax was appropriately deducted and deposited concerning the disputed expenses. The appeal was accepted for statistical purposes, while other grounds of the appeal were also adjudicated in favor of the company.

This decision comes in the wake of Sapphire Foods' previous communication on June 26, 2025, when they disclosed the receipt of the order from the Office of the Commissioner of Income Tax. The favorable ruling from the ITAT could enhance investor confidence, given the implications it may have for the company’s financial position and tax liabilities moving forward. As Sapphire Foods continues to navigate its financial obligations, this ruling may serve as a precedent for similar cases in the future, emphasizing the importance of accurate tax compliance and the verification processes involved.