CBDT to pursue Rs 20K Cr
Cairn India tax demand
CBDT Chariperson Ms Anita Kapur said the Income tax Department will continue to defend the Rs.20K Crore tax demand on Cairn India even after the company merges with parent Vedanta Ltd as the Court process has started. She said “This has gone to Court process. We have a provisional attachment order. We will ensure that we remain secure, whatever position changes we will ensure our security. We are certainly keeping watch on it”.
Cairn India had earlier resisted the IT notice for Rs.20K Crore demand for not deducting withholding tax (TDS) on alleged capital gains made by its erstwhile promoter, Cairn Energy Plc.
A separately notice was also raised on Cairn Energy Plc for Rs 10K Crore tax for the alleged Rs 24.5K capital gains in 2006 by sale of its Indian assets to a new company, Cairn India, and getting it listed on the stock exchanges. As a consequence to the notice Cairn Energy plc was restrained from selling or transferring the residual 9.8 per cent stake in Cairn India. The shares remain frozen since then. In the meanwhile Cairn Energy has already challenged the tax demand under the India-U.K. Bilateral Investment Protection Treaty and initiated the arbitration process.