Cairn India moves Delhi HC against tax demand

Cairn India on Monday moved Delhi High Court in connection Rs 20,495 crore tax demand slapped against it by the income tax department for allegedly failing to pay taxes on gains made by its former parent company, in a share transfer transaction that took place eight years ago.

Cairn in its petition has sought quashing of the income tax department’s demand order saying the proceedings were initiated after a lapse of more than six years from the end of the relevant financial year of 2006-07.

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The petition said that the courts have held that such proceedings should be initiated within a reasonable period of four years.

In the current matter, the tax notice came after Cairn Energy, the Indian company’s former promoter, was slapped with a Rs 10,247 crore tax demand for an alleged Rs 24,500 crore worth of capital gains it made in 2006 while transferring all its India assets to a new company, Cairn India, and getting it listed on the stock exchanges.

(With PTI inputs)