Cairn India has always been fully compliant with all Indian Income tax laws
CAIRN India in a Press Release yesterday stated,
During Q4FY15, the Company received an order from the Income Tax Department for an alleged failure to deduct withholding tax on alleged capital gains arising during 2006-07 in the hands of Cairn UK Holdings Limited (CUHL), our erstwhile parent company, a subsidiary of Cairn Energy Plc. This was in respect of the transaction of CUHL transferring the shares of Cairn India Holdings Limited (CIHL) to Cairn India Limited as part of internal group reorganisation in 2006-07 to facilitate the IPO of Cairn India Limited.
A demand of approx. INR 20,495 crore (comprising tax of approx. INR 10,248 Crore and interest of approx. INR 10,247 crore) is alleged to be payable. The Company does not agree with this alleged demand and is pursuing all possible options to protect its interest. A writ petition has been filed before Honourable Delhi High Court. Cairn India has always been fully compliant with all Indian Income tax laws. Income tax assessments including transfer pricing assessment were duly completed for FY 2006-07, earlier.
Vedanta Resources Plc has filed a Notice of Claim against the GOI under the UK-India bilateral investment treaty in order to protect its legal position and shareholder interests.