Karnataka court quashes IT dept's block on Rs 37bn Xiaomi funds
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New Delhi: A Karnataka court invalidated the income tax department's block on Chinese company Xiaomi Corp's fixed deposits worth Rs 37 billion, Reuters reported, citing two sources familiar with court proceedings.
On the Friday development, Xiaomi or the income tax department did not reply to Reuters' requests for comments.
More details on the court decision will be available only later.
The income Tax department had frozen Xiaomi's funds in February as part of an investigation, citing alleged tax evasion.
The allegation was that the company purchased smartphones from its contract manufacturers at inflated costs in India. This had allowed it to register a smaller profit by selling them to customers as well as evading corporate income taxes, a Reuters report in May suggested.
The income Tax department froze Xiami's funds while it was already having a legal battle after India's financial crime-fighting agency had blocked $666 million on alleged illegal foreign remittances. A judgment on that case, after Xiaomi's challenge, is yet to be pronounced.