Strongly contesting a `10,247- crore tax demand raised on its eight-year old internal business recognition, British oil explorer Cairn Energy on Tuesday said it will seek damages from the government for the loss in value of its holdings suffered because of the notice.
The firm said it has initiated arbitration for resolution of the tax demand linked to 2006 reorganisation of Cairn India, its one-time Indian subsidiary with oilfields in Rajasthan.
Cairn Energy, which in 2011 sold majority stake in Cairn India to mining major Vedanta Resources, had to scale back investments as it was barred by the Income Tax Department from selling its residual 9.8 per cent stake.
“Cairn contests the basis of the draft assessment and the Notice of Dispute is supported by detailed legal advice on the strength of the legal protections available to it under international law.