The tax battle between British oil major Cairn and the government is set to get murkier, with the income tax (I-T) department considering appealing in a high court against a tax tribunal’s order giving Rs 18,800-crore interest relief to the company.
The department is also mulling the imposition of a penalty on Cairn in the range of 100-300 per cent, as the Edinburgh-based company missed the opportunity to get it waived under the dispute resolution scheme that closed on January 31.
The I-T appellate tribunal (ITAT) upheld last week the much-discussed capital gains tax demand of Rs 10,247 crore on Cairn under the controversial retrospective amendment to the law. The tribunal, however, gave relief to the company on the interest amount, on the ground that it was a retrospective levy and could not have been anticipated by the assessee. Besides, the ITAT held that according to section 234B of the I-T Act, a foreign company that pays tax deducted at source is not liable to pay advance tax. The view has been held by the Supreme Court as well. However, the department has filed a review petition in the apex court in a similar case of interest liability. Read More…
Credit By: business-standard.com
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