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% 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 Anil Agarwal-owned Vedanta had last month declared for shareholders a Rs 21.2 per share dividend and a 7.5% payment on preference shares. For Cairn, total receivables came to about Rs 440 crore. Vedanta transferred this to a separate account after an Income Tax Department order and it was taken over by the authorities.