The Income tax department has slapped anRs 138 crore tax demand, excluding interest, on Chennai-based information technology and telecom products firm Redington (India) Ltd.

The demand, based on the directive from transfer pricing officer pertains to "imputed profits" on transfer of its 100% shareholding in Redington Gulf FZE to a step down wholly-owned subsidiary Redington International (Holdings) Limited in 2008-2009 without any consideration, RedingtonBSE 0.50 % said in a filing to the Bombay Stock Exchange.

Redington effected the said transaction to attract investment from Bahrain-based private equity fund Investcorp in 2008, which bought a 26% stake in Redington International for $65 million (about Rs 353 crore). Last year, Investcorp sold back the stake in Redington International to Redington IndiaBSE 0.50 %, for $114.8 million.

Redington said it has the opportunity to approach the Dispute Resolution panel against the demand.

Redington, which distributes Apple iPhone and Amazon Kindle in India, joins list of multinational companies like energy giant Shell, Cadbury, Vodafone and Nokia that have been slapped with penalties for violating transfer pricing rules.(Economic Times)