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.
Cairn India Ltd submitted further clarification stating "We would like to inform you that Cairn India Limited has received an order from the Income Tax Department today 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. Rs 20,495 Crore (comprising tax of approx. Rs 10,248 Crore and interest of approx. Rs 10,247 Crore) is alleged to be payable. Cairn India Limited does not agree with this alleged demand and will pursue all possible options to protect its interest.
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.
As was communicated yesterday, from the media reports we understand that tax demand has also been made by the Income Tax Department on CUHL on this matter."
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