KUALA LUMPUR: DRB-HICOM Bhd's subsidiary Hicom Holdings Bhd (HHB) has received a notice of assessment from the Inland Revenue Board (IRB) for the 2020 assessment year, amounting to RM246.25 million, including penalties.
In a filing to Bursa Malaysia Securities today, the group said the notice was issued following the IRB's decision to classify a gain from the disposal of a long-term investment in a subsidiary as taxable income under the Section 4(a) of the Income Tax Act 1967 for the 2020 assessment year.
In financial year 2019, HHB completed the disposal of its entire equity interest of 97.37 per cent interest in Alam Flora Sdn Bhd to Malakoff Corp Bhd for RM869 million, booking a gain of RM514.7 million for DRB-Hicom.
HHB given 30 days from the date of the notice to appeal against the IRB's decision.
Upon consulting its tax counsel and solicitors, DRB-HICOM said HHB is of the view that there are valid legal grounds to defend against the notice.
Therefore, it said HHB intends to appeal and if required, initiate legal proceedings to challenge the basis and validity of the notice raised by the IRB.
"DRB-HICOM will make further announcement if there are any material developments pertaining to this matter," it noted.
At the time of writing, DRB-HICOM's share price was four sen or 3.42 per cent lower at RM1.13, valuing the group at RM2.18 billion.