Cairn gets fresh notice to pay Rs 10,247 cr tax.
By Mail Today Bureau in New Delhi THE Income Tax Department has issued a fresh demand notice of Rs 10,247 crore on UK oil exploration company Cairn Energy Plc as a follow up to the decision of the Income Tax Apellate Tribunal ( ITAT) upholding the levy of retrospective tax.
ITAT in its March 9 order held that Cairn Energy was liable to pay tax on the 2006 transfer of India assets to newly created Cairn India, prior to its listing. It, however, held that interest cannot be charged on it as the demand was raised using retrospective tax legislation.
The Income Tax Department had raised a tax demand of Rs 10,247 crore and another Rs 18,800 crore as interest for 10 years.
Following the ruling of the ITAT, an amended tax demand, received on March 31, 2017, noted that late payment interest would now be charged from February 2016, i. e. from 30 days following the date of the original 2016 final assessment order, Cairn said in a notice to shareholders.
The company said the decision of the ITAT is potentially subject to appeal. Cairn had on January 24, 2014 received a draft assessment order for the alleged capital gains it made in 2006. The order restrained the company from selling the residual 9.8 per cent stake it holds in Cairn India.
Cairn Energy had in 2011 sold Cairn India to Vedanta. Then, on February 4, 2016... a final assessment order in respect of the Indian fiscal year ended March 31 2007, ( was) issued by the Indian Income Tax Department in the amount of Rs 10,247 crore plus interest back dated to 2007 totalling Rs 18,800 crore, Cairn said.
Income Tax Department has dropped earlier demand of Rs 18,800 crore as interest for 10 years.
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