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I-T dept sells Cairn Energy shares to recover retro tax

Tuesday, July 10, 2018

New Delhi: The Income Tax department has sold about 40 per cent of British oil firm Cairn Energy plc's shares in Vedanta to recover a part of Rs 10,247-crore demanded as retrospective tax.

Weeks before an international arbitration tribunal begins final hearing in Cairn's challenge to the retrospective tax, ?the Indian I-T department last month sold about 2 per cent of the firm's shares in Vedanta in at least five tranches totalling USD 216 million, and may sell remaining stake as well, the British firm said in a statement.

The tax department had in January 2014 used a two-year-old retrospective tax law to raise a Rs 10,247-crore demand on alleged capital gains made by Cairn Energy on a decade-old internal reorganisation of India business.

This was followed by attaching the company's residual 9.8 per cent shares in its erstwhile subsidiary, Cairn India. Cairn India was subsequently merged with its new parent Vedanta, in which Cairn Energy held about 4.95 per cent stake.

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