IT Dept slaps Rs.20,495 cr tax demand on Cairn India

Cairn India Ltd, the petroleum arm of London-headquartered Vedanta Resources Plc, has received a tax notice of Rs.20,495 crore from the Income Tax department for failing to deduct withholding tax on alleged capital gains by its erstwhile promoter, Cairn UK Holdings Ltd (CUHL), a subsidiary of Edinburgh-based Cairn Energy Plc. The tax demand pertains to Cairn UK Holdings Ltd transferring the shares of Cairn India Holdings Ltd (CIHL) to Cairn India, as part of an internal group reorganization in 2006-07, to facilitate the initial public offering of Cairn India.