I-T Appellate asks Cairn UK to pay Rs 10K cr capital gains tax

The Income Tax Appellate has confirmed Rs 10,000 crore gap gains tax on Cairn UK. This refers to the transaction before Cairn’s IPO where Cairn Energy transferred its holding in Cairn India from Cairn India Holdings to Cairn India.

Shares of Cairn India Holdings were acquired by Cairn India Limited from Cairn UK. The Income Tax department had said the value of these shares are derived solely from the assets located in India.

Therefore, it was brought to tax under the section 9(1)(1) of the Income Tax Act and levied capital gains to the extent of Rs 24,000 crore.

On that the capital gains tax was calculated at roughly Rs 10,000 crore.