I-T dept to defend Rs 20,495-crore tax claim on Cairn India

NEW DELHI: Income tax authorities are keeping a close watch on the Cairn India-Vedanta merger plan and will make all efforts to ensure the exchequer’s interests are protected, said Central Board of Direct Taxes chairperson Anita Kapur. "This has gone to court process. We have a provisional attachment order. We will ensure that we remain secure… We are certainly keeping watch on it," Kapur told reporters on Tuesday.

Metals and mining giant Vedanta Ltd plans to absorb subsidiary Cairn India in an all-stock deal. Tax authorities will defend the Rs 20,495-crore tax claim they have made on Cairn India even after the company is merged with its parent. Cairn India has challenged the March notice for failure to deduct withholding tax on capital gains made by erstwhile promoter Cairn Energy Plc.

On the levy of minimum alternate tax on foreign portfolio investors, Kapur said taxmen won't resort to coercive methods to recover this from foreign portfolio investors (FPIs). They will wait for a Supreme Court ruling in a case on the matter and the AP Shah panel report on the issue. "I cannot anticipate what AP Shah panel will do. Shell and Vodafone case went against us and once we accepted that judgment, we told our officers please don't do future assessments and please don't further agitate these in appeals," she said. "Sometimes taxpayers pay MAT and they go and file an appeal. This is an issue which is controversial... There will always be a process of refund in this," she said.