Cairn UK Holdings moves Delhi HC over capital gains tax demand

Cairn UK Holdings Ltd on Wednesday moved the Delhi High Court against tax tribunal ITAT's order holding the company liable to pay Rs 10,247 crore as capital gains tax on transfer of shares it did through an internal reorganisation of its Indian business in 2006.

A bench of Justices S Muralidhar and Pratibha M Singh said the matter will be heard in due course and if it does not, then the parties, including the tax department, can move an application for early hearing.

Cairn in its plea has challenged the Income Tax Appellate Tribunal's March 9 order by which the UK-based company was held liable to pay Rs 10,247 crore as capital gains tax.

The company had approached ITAT after it was slapped with a tax assessment order of Rs 10,247 crore in January 2014.

The I-T department had raised a total tax demand of Rs 29,047 crore on Cairn, including Rs 18,800 crore in backdated interest.

In its plea before the ITAT, Cairn had said the assessing officer had "erred" in raising the demand by invoking the retrospective amendment to section 9 of the Finance Act introduced in 2012, which was not on the statute when the India-United Kingdom Tax Treaty was entered into.