See if offer for Nokia’s Chennai plant is acceptable: Delhi HC to I-T Dept
The Delhi High Court on Friday asked the Income Tax department to examine the offer by an independent buyer for Nokia India’s mobile manufacturing plant in Chennai and to sell the asset, which has been frozen over an alleged Rs 10,000 crore tax dispute, if the amount is acceptable.
The I-T department has been against the sale of the unit and related assets saying as per its draft assessment, which is not yet over, Nokia has to pay a tax of around Rs 10,000 crore and if unit is sold it would be difficult to recover the amount. It said the amount is for only one assessment year and there are other assessment years. It said that as per previous orders of the court, Nokia or its parent company in Finland had to secure the department up to an amount of Rs 3,500 crore, but the same has not been done yet.
A bench of justices Badar Durrez Ahmed and Sanjeev Sachdeva suggested if the buyer’s price is not acceptable to the I-T department, it should then consider appointing an independent valuer to carry out valuation of the plant and related assets. Another alternative it suggested was to put up the assets for auction, by making the amount offered as a reserve price, saying “ultimately we have to maximise the price”.
The offer was placed before the court and handed over to I-T department in a sealed cover during hearing of Nokia’s plea seeking permission to sell the assets as it had found a buyer. Nokia argued before the court that each day the assets remain attached and unused, its value decreases and suggested the department is free to sell it and take the sale amount towards the company’s tax liability. It said it met all the “players” in the market and finally was able to find an “arms length buyer” for its assets, but said it cannot confirm whether the buyer will buy the assets if too much time lapses. The department said it will inform the court about its decision on April 23, the next date of hearing.
During the proceedings, the IT department said that the company had been asked by the court to give a list of inventory as well as valuation of the assets. It said while the company gave the list, it is yet to provide the valuation of its assets. Nokia, on the other hand, said that carrying out a valuation would take a lot of time and the buyer it has found may not wait that long.