nokia logo NPUDelhi High court has provided a favorable ruling to Nokia India in the latest hearing of Income tax case. The court has declined the request of the Income Tax Department to direct Nokia India to deposit $557 million in an escrow account for any future tax demand, and clarified that the company did not need to pay the sum immediately.

“We want a simple undertaking that you (Nokia India) have gone through the order and accept the condition (stated therein),” the court said to the company.

“…We have not accepted the request of Revenue for deposit of Rs.3,500 crore in their escrow account. The request is not in nature of clarification, and is beyond the scope of the order (of December 12, 2013, paving way for sale of Finnish mobile firm to Microsoft subject to certain conditions),” a bench of justices Sanjiv Khanna and Sanjeev Sachdeva said.

Court also clarified that Nokia India did not need to pay the amount immediately, but as and when the demand was raised by the Income Tax Department and only when Nokia doesn’t succeed in getting a stay.

To a Nokia India’s query, it said, “You will have to pay that amount if you fail to get a stay. Demand will be enforced only if there is no stay.”

This removes all the hurdles from the path of Chennai plant’s handover to Microsoft under the impending  MS-Nokia deal.