The income tax (I-T) department is looking to sell its stake in Cairn Energy estimated to be worth Rs 2,700 crore, despite protest from the UK-based company, reported The Times of India.

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According to the report, the development comes after the National Securities Depository (NSDL) transferred all 18 crore shares of Cairn Energy in Vedanta to the IT department.

The department in turn has sold a third of these shares worth Rs 1,580 crore last February, the report said.

The department alleged in its assessment order that Cairn Energy had set up several subsidiaries, created cross -holdings in multiple entities, and launched an IPO in India even though it had decided to exit the country, the report stated. Cairn, on the other hand had justified the raising of the IPO stating it had informed Sebi and FIPB.

“A portion of IPO proceeds were remitted to CIL’s parent company- as was disclosed to the FIPB, Sebi and is clearly laid out in the prospectus from 2006 and the annual accounts of the relevant entities in 2006. Proceeds from an IPO (a fresh issue of shares) have never been taxable in India, and still is not taxable,” firm’s spokesperson was quoted as saying in the report.

First Published:Jul 20, 2018 12:29 PM IST