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Tax Department seizes Rs 440-crore Cairn Energy dividend income

   April 16, 2018        326   

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.

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.