 "Rs 20K crore tax calculated on wrong principles: Cairn India to HC")
The I-T department had issued the demand for Cairn’s alleged failure to pay tax on gains made by its former parent company, Cairn Energy Plc, in a share transfer transaction eight years ago.
Cairn submitted before a bench of justices Badar Durrez Ahmed and Sanjeev Sachdeva that it had recalculated the tax demand to be around Rs 5000 crore, of which Rs 4200 crore was already secured and only the remaining was unsecured.
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The submission was made in response to the court’s query as to what was the company’s offer to secure the tax demand made by the I-T department.
Cairn also sought an interim order against the tax demand but Attorney General Mukul Rohatgi opposed the relief sought by the company and said there was “no question of interim order if they are not able to give any security.”
However, the bench heard arguments briefly and listed the petition for further hearing on May 7 as it had some full bench matter to attend to.
On April 16, the court had asked Cairn India how it would secure the Rs 20,495 crore demand raised by the I-T department.
Cairn India had told the court that of the principal tax demand of Rs 10,248 crore, Rs 4,200 crore was already secured and it would inform about the rest and what kind of security or guarantee it can give on the next date of hearing.
The court was hearing Cairn India Ltd’s (CIL) plea challenging the I-T department’s demand on the ground there has been “unreasonable and atrocious” delay on the part of the authorities who exercised their power “unreasonably” while making the demand.
Cairn has sought quashing of the I-T 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.