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I-T dept to challenge ITAT relief to Cairn Energy in HC

The Income Tax Department is likely to challenge in high court a tax tribunal order giving relief to British oil firm Cairn Energy plc from payment of interest on a Rs 10,247 crore tax demand it had raised retrospectively.

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The Income Tax Department is likely to challenge in high court a tax tribunal order giving relief to British oil firm Cairn Energy plc from payment of interest on a Rs 10,247 crore tax demand it had raised retrospectively.

The department feels its January 2016 final assessment order raising a tax demand of Rs 10,247 crore on alleged capital gain the British firm made when it transferred its India assets to a newly created company Cairn India in 2006, and another Rs 18,800 crore in interest for non-payment for 10 years, is correct.

The Income Tax Appellate Tribunal (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.

"We feel interest is due and is liable to be paid. We plan to soon approach the high court seeking quashing of the ITAT order," a senior income tax department official told

 

(This article has not been edited by DNA's editorial team and is auto-generated from an agency feed.)

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