New Delhi : Within weeks of tax tribunal ITAT upholding levy of retrospective tax, the Income Tax Department has slapped a fresh demand note of Rs 10,247 crore on British explorer Cairn Energy Plc.
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 in 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. Cairn said the decision of the ITAT is “potentially subject to appeal.”
The company 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.