Hearings have begun on the arbitration challenge mounted by mining billionaire Anil Agarwal-led Cairn India against a Rs 20,500 crore retrospective tax demand and a final order is expected in next few months, sources privy to the development said.
The tax department had in January 2014 slapped a tax demand of Rs 10,247 crore on British oil explorer Cairn Energy plc for alleged capital gains it made on a 2006 internal reorganisation that saw the Indian business being transferred to a new firm, Cairn India Ltd which was subsequently listed.
In March 2015, it also slapped a notice on Cairn India, which was in 2011 acquired by Agarwal’s Vedanta Group, for its failure to withhold tax on capital gains made by its erstwhile parent, Cairn Energy.
Cairn India was subsequently merged into Vedanta Ltd. It is now called Vedanta Ltd.
Cairn Energy had challenged the tax demand through an international arbitration and the sources said that the final hearing in that case is scheduled for August.
Separately, Vedanta-controlled Cairn India too challenged the order through a different arbitration notice in March 2015. Read More
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