Tata Industries, which was served a Rs 45-crore tax demand notice by the Income Tax Department for purchasing a Rs 660-crore stake from AT&T, on Saturday said it has paid the demanded amount.

The company said it now planned to take legal recourse. "The I-T department has raised a demand notice on Tata Industries Limited. Although Tata Industries has paid the demanded amount, it is pursuing remedial legal action available and applicable as per the law of the land," a company spokesperson said.

The I-T department had raised the tax demand for the stake purchase in September 2005.

The Aditya Birla group, Tata Group and AT&T Cellular Services Mauritius Pvt Ltd had stakes in Idea Cellular, before TIL acquired AT&T shares in September 2005. AT&T Cellular Mauritius was held by two US companies, Cingular Wireless Services Inc and MMM Holding LLC.

AT&T had offered its shares to the Birlas and Tatas equally at the time of its exit from the company. TIL acquired the shares of AT&T Cellular Services Mauritius Pvt Ltd through an agreement with the two companies.

After AT&T sold its shares to Tata Industries, the Income Tax department initiated a probe into the deal. It treated the transaction as one between an Indian company and the US.