"It sought $1.05 billion in compensation for the loss of value its 9.8 per cent shareholding in its erstwhile subsidiary Cairn India suffered following Income Tax Department raising the tax demand in January 2014 and attaching the shares. "The Indian government's decision not to demand capital gains tax was no mere oversight or accident. Cairn India's IPO was among the largest in Indian history, and the sums involved were significant. Through the IPO it raised Rs 8,616 crore and then in 2011 went on to sell majority stake in Cairn India to mining giant Vedanta Group for USD 8.67 billion.Cairn Energy still holds 9.8 per cent in Cairn India which the I-T Department has barred it from selling. It is in this restructuring that the I-T Department says Cairn made capital gains of Rs 24,503.50 crore.If it had known that India would change rules and retrospectively tax, the company would have restructured business differently and listed the firm on UK exchange, it added.

Source: Economic Times July 12, 2016 06:56 UTC