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Income tax department rejects Nokia India's offer to pay Rs 2,250 cr

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Nokia had sought lifting of a stay on transfer of assets in India in order to proceed with the acquisition deal with Microsoft. (AP) Nokia had sought lifting of a stay on transfer of assets in India in order to proceed with the acquisition deal with Microsoft. (AP)
SummaryNokia had sought lifting of a stay on transfer of assets in India in order to proceed with the acquisition deal with Microsoft.

The Income Tax (I-T) Department on Monday told the Delhi High Court that the offer of Finnish mobile maker Nokia India to pay a minimum deposit of Rs 2,250 crore to it, out of the company’s total tax liability of nearly Rs 6,500 crore, is not acceptable.

Nokia India, however, stuck to its offer and said it is for the department to decide if they are better off with the proposed amount or without it.

A bench of justices Sanjiv Khanna and Sanjeev Sachdeva observed “you (Nokia) are offering nothing”. To this, senior advocate Harish Salve, appearing for Nokia, said “we are not in a position to offer more” and added that Rs 2,250 crore is minimum depending upon the outcome of its deal with Microsoft, the PTI reported. Earlier, the mobile handset-maker firm had sought lifting of a stay on transfer of its assets in India saying the court’s injunction will jeopardise the sale of its Indian arm to Microsoft under the $7.2 billion global deal.

The bench listed the matter for December 9 when Nokia has to give details of its assets and liabilities as well as how much tax it has paid here.

Nokia also said the I-T department is wrong if they think they are better off with Microsoft not buying and the assets being auctioned off.

It also said its assets in India have "value in use but not value in sale" and the only person who may use it is Microsoft.

"Either they will buy our plant or they will source phones from elsewhere. If Microsoft gets cheaper phones in another country, it will go there," Salve told the court.

In a statement, Nokia said, “Nokia would like to highlight that today’s hearing was about the unfreezing of the assets, and not the final hearing on the ongoing tax issue as reported by some sections of the media. Nokia will continue to cooperate with the government and the tax authorities on the ongoing tax case.”

The company called for urgency in resolving the issue so that the “uncertainty about the site’s future” can be resolved by December 12, the deadline for transfer of assets to Microsoft.

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