- Former Union minister P Chidambaram moves Delhi court seeking anticipatory bail in
- NASA set to launch world's first mission to touch the Sun
- Need to strike a balance between conflicting rights of protestors and that of citizens:
- Toronto police say nine people shot and shooter is dead in city's Greektown.
Income-Tax dept seizes Rs 440-cr dividend income of Cairn Energy
The Income-Tax department has seized a further Rs 440 crore of dividend income due to Cairn Energy Plc to recover a part of the Rs 10,247 crore tax demand it had raised on the British firm using a retrospective tax legislation.
The Tax department had previously seized Rs 666 crore of dividends due to Cairn from its 4.95 per cent residual holding in Vedanta Ltd. It has also refused to pay tax refund of Rs 1,594 crore due to Cairn as a result of overpayment of capital gains tax to recover the dues.
Sources said Vedanta, owned by billionaire Anil Agarwal, had last month declared for shareholders a Rs Rs 21.2 per share dividend and a 7.5 per cent payment on preference shares. For Cairn, the total receivable came to about Rs 440 crore.
But due to an Income Tax Department order, Vedanta transferred that money to a separate account. This was then taken over by the tax department.
The action comes ahead of the beginning of the final hearing in the arbitration initiated by Cairn to oppose the retrospective tax demand which was raised on a 2006 internal reorganisation of the firm’s India unit, called Cairn India.
Cairn India was in 2011 acquired by Vedanta but the British firm continued to hold 9.8 per cent shareholding. Cairn India was last year merged into Vedanta Ltd. On merger, Cairn Energy’s holding in Vedanta came to 4.95 per cent.
When contacted, a spokesperson of the Central Board of Direct Taxes (CBDT) confirmed taking over the dividend, saying its assessment order dated March 9, 2015 raised a tax demand of Rs 1,0247 crore. “This order was confirmed by the Dispute Resolution Panel on December 31, 2015. However, no demand was paid by the taxpayer at that stage,” the spokesperson said.
Cairn filed an appeal before Income Tax Appellate Tribunal, which on March 9 last year upheld the assessment order.
“As there is no stay of demand from any court or authority, the entire demand is enforceable. However, as the taxpayer did not pay the demand, the Assessing Officer adjusted the refund for AY 2012-13 amounting to Rs 1594 crore. Dividend of Rs 666 crore was also adjusted against the pending demand in June 2017,” the spokesperson said.
Stating that the Cairn Energy’s shares in Vedanta have been attached, dividend declared by Vedanta of about Rs 440 crore was also collected as tax in March 2018, the spokesperson said. “Total recovery in FY 2017-18 comes to Rs 2700 crore of which the dividend amount is Rs 1106 crore and recovery by way of refund adjustment is Rs 1594 crore,” the spokesperson added. The Tax department had in January 2014 used a two-year-old law to raise a Rs 10,247 crore demand on Cairn Energy. The 2012 law gave the government powers to impose taxes retrospectively. Following the draft assessment order of January 2014, the tax department attached the company’s residual 9.8 per cent shares in its erstwhile subsidiary, Cairn India, and confiscated dividend income it was due to receive. Income tax refund of Rs 1,594 crore was also confiscated.
A final assessment order in January 2016 raised tax demand of Rs 10,247 crore plus an interest of Rs 18,800 crore. However, the interest demand was quashed by the Income Tax Appellate Tribunal in late 2016.
Following that, the Income Tax Department issued a revised demand including interest running from February 2016, that is 30 days after the date of the assessment order. While interest will be charged on the principal at a rate of 12 per cent a year from February 2016, penalties are assessed as 100 per cent of the principal tax due.
- Chief technology officers of Reliance Jio, Bharti Airtel quit 23 Jul 2018 | PTI
- Maran loses Rs 1,323-cr arbitration against Spicejet; but gets Rs 571 cr refund 23 Jul 2018 | PTI
- Commerce Ministry urges plastic industry to formalise strategy to double exports 23 Jul 2018 | PTI
- Federal Bank gets RBI nod to enter Bahrain, Kuwait, Spore 23 Jul 2018 | PTI
- Sold 4k satellite phones in past year; targeting 10k units by March 2019: BSNL chief 23 Jul 2018 | PTI
- Report: Sensex may trade at 36K by Jun’19 on poor poll outcome 23 Jul 2018 | PTI
- Co-op banks to create investment fluctuation reserve to deal with market risks 23 Jul 2018 | PTI
- Govt to ask MSMEs under GSTN to obtain Udyog Aadhaar 23 Jul 2018 | PTI
- GST rate cut, return simplification to increase revenue, compliance: CII 23 Jul 2018 | PTI
- India Inc hails GST Council’s decision to allow quarterly return filing 23 Jul 2018 | PTI
Sunday EditionView All
22 Jul 2018 | AFP | tehran
Iran’s supreme leader Ayatollah Ali Khamenei said on Saturday that negotiations with the United States are “useless” because it does not abide by agreements. “As I have previously said, we cannot trust in the words of the United States and even in their signature, so negotiations with the United States are useless,” Khamenei told a gathering of Iranian diplomats in Tehran...
STATE EDITIONSView All
23 Jul 2018 | Staff Reporter | Raipur
Capital city of Raipur is crucial for all parties, as it has four Assembly constituencies. Congress party which has been trying to make inroads into these constituencies is now in search of a new district president for the Capital city...