SC refuses to clear tax roadblock in Nokia-Microsoft deal
15 March 2014
The Supreme Court on Friday dealt Finnish handset-maker Nokia a setback as it dismissed the company's appeal challenging a Delhi High Court order regarding the transfer of the company's Indian assets to software giant Microsoft as part of a takeover deal.
The transfer has been blocked until Nokia India settles a a Rs21,000-crore tax dispute.
The Delhi High Court had last month asked Nokia to give a 'simple undertaking' in addition to depositing Rs2,250 crore in an escrow account.
This new condition, which the company refuses to agree with, would result in Nokia agreeing to an open-ended guarantee that the company would meet any future tax claims relating to the dispute.
These conditions must be first satisfied before Nokia can transfer its India assets to Microsoft.
Nokia thereupon, appealed the Supreme Court last month that it be allowed to transfer its assets in time for the acquisition.
Nokia, in a statement, said that it was disappointed by Supreme Court's decision.
''The decision means that the case now reverts to the 5 February Delhi High Court ruling on the asset transfer. The company strongly believes its offer to the Indian tax department is fair for all sides,'' the statement said. ''Nokia will now consider its next steps.''
The apex court had earlier asked Nokia India Pvt Ltd to come up with a concrete proposal to settle its tax row with the income tax department.