Monday, Nov 24, 2014

Nokia told not to dispose of assets without HC nod

Supreme Court directed Nokia India not to dispose of its Chennai plant's assets without the Delhi High Court’s permission. (Reuters) Supreme Court directed Nokia India not to dispose of its Chennai plant's assets without the Delhi High Court’s permission. (Reuters)
Posted: July 22, 2014 10:16 am

In the ongoing Rs 21,000-crore tax dispute, the Supreme Court on Monday directed Nokia India not to dispose of its Chennai plant’s assets without the Delhi High Court’s permission.

A bench headed by Justice AR Dave, while giving such directions, allowed the Income Tax Department to withdraw its appeal that had sought continuation of attachment of assets of Nokia India unless the firm fully paid its existing liability R3,862 including interest under section 201(1)/201(1A) of the Income Tax Act, deposit R4,958 crore in an escrow account for adjustment against income-tax liabilities likely to arise on account of TP adjustment and deposit in the escrow account the dividend amount of R3,500 crore which was repatriated to Nokia Corporation, Finland, in August 2013 under fraudulent circumstances.

The order came after Solicitor General Ranjit Kumar, on behalf of the Income Tax Department, argued that the government is concerned about its dues.

Nokia counsel Vikas Srivastava told the court that its $7.2 billion deal with Microsoft concluded long back and the transfer of assets of its Chennai plant could not be done as the company could not meet the conditions imposed by the high court in December last year.

The apex court had in March stalled transfer of Nokia’s Chennai plant after the company failed to fulfill 16 conditions imposed by the high court.

It had dismissed Nokia India’s appeal seeking smooth transfer of its Chennai plant, which was integral to the handset maker’s global deal announced in September last year.

The India deal got stuck in the tax claims relating to alleged violation of withholding tax norms by Nokia India since 2006, while making royalty payments to its Finnish parent, which amount to R21,000 crore for 2006-2013, including penalties.

Indu Bhan | The Financial Express

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