Chennai unit sale: HC okays urgent hearing of Nokia tax dispute
The tax dispute between Nokia India and Income Tax department, which has raised a claim of Rs 10,000 crore on the telecom firm, would be taken up by the Delhi High Court for an urgent hearing next week. The sale of Nokia India’s mobile manufacturing plant in Chennai has been frozen over the tax dispute.
A bench of justices Badar <g data-gr-id="31">Durrez</g> Ahmed and Sanjeev Sachdeva on Wednesday agreed to hear the matter on May 26, instead of September 7 fixed earlier, after Nokia told the court it has found a buyer for its Chennai factory. Senior advocate Kapil Sibal, appearing on behalf of the company, said there was urgency in the matter as a buyer has been found. He also said that Nokia would also give the list of its assets before the next date of hearing.
The I-T <g data-gr-id="42">department on the other hand</g> said the assets number over 40,000 and their valuation was not yet known. The company, however, said that <g data-gr-id="40">valuation</g> of the assets would be known as soon as the report of Ernst and Young India Pvt Ltd (EY) was received. EY was appointed by the court as the <g data-gr-id="32">valuer</g> for Nokia India’s Chennai mobile plant and its other assets. The court had said that EY would do the valuation of the assets of the company on both ‘<g data-gr-id="34">on going</g> concern’ (company not bankrupt) and ‘non going concern’ (company has gone bankrupt) methods. On April 24, the Income Tax department had told the court that the amount offered by an “arm’s length buyer” for Nokia India’s Chennai plant was “very little”. An ‘arm’s length’ transaction is one in which the buyer and seller of a product act independently and have no relationship with each other to ensure that they act according to their self-interest and are not influenced by the other party.
The I-T department had said that the offer amount was very little and if the unit and related assets were sold, it would be difficult to recover the tax amount which it has tentatively placed at Rs 10,000 crore. This tax amount was only for one assessment year and there were demands for other assessment years, it had said.