New Delhi : Facing a potential tax demand on alleged capital gains of Rs 24,500 crore it made seven years back, London-listed Cairn Energy Plc said it will in three months assess impairments on the value of its shareholding in Cairn India.
Income Tax authorities in January contacted Cairn over an alleged Rs 24,500-crore capital gains it made when in 2006-07 it transfered all its India assets to a new company — Cairn India, reports PTI.
While the firm maintains that none of the transactions undertaken by it during that fiscal were chargeable to tax in India, the Income Tax Department restrained from disposing of its about 10 per cent remaining equity in Cairn India.
“Cairn continues to engage with the Indian Income Tax Department and will also pursue the matter with the Indian government formed after the result of the general elections is announced on May 16, 2014,” the company said in a statement. The company had in April this year received two more notices asking it to file tax return for 2006-07 as well as a show-cause for not withholding tax on dividends paid by Cairn UK Holdings Ltd to its parent company Cairn Energy plc.
“Cairn has filed a nil return for the 2006-07 year,” the statement said.