Delhi HC stays Rs 1,140 crore tax demand against Oyo

In a big relief to OYO Hotels & Homes, the Delhi High Court has stayed the recovery of tax demand of Rs 1,140 crore raised under provisions of the so-called angel tax for the assessment year 2021-22 (Apr-Mar).

The demand was raised under Section 56(2)(viib) of the Income Tax Act on account of the addition to the income after the assessee had issued compulsorily convertible preference shares to its holding company Oravel Stays. This investment by Oravel, according to the department, into its Indian subsidiary was an income, thus taxable.

However, Oyo’s…