Nokia Corp is finally able to transfer its Indian assets to Microsoft as part of its $7.2-billion deal with the Redmond-based tech giant as the Delhi High Court has directed the Income-Tax (I-T) authorities to revoke the freeze on the handset maker's Indian assets.

Indian tax authorities had frozen the Finland-based handset maker's Chennai plant after the company failed to pay tax dues it incurred on handsets made at the factory.

The Indian tax department claims tax dues of Rs 21,000 crore, which includes penalties for default of tax and interest.

A bench of Justices Sanjiv Khanna and Sanjeev Sachdeva of the high court asked the tax authorities to unfreeze the assets, albeit with a condition. The court asked the company to deposit at least Rs 2,250 crore in an escrow account as a safeguard to allay the tax department's fears.

The handset maker will have to give an undertaking to pay another amount of Rs 3,500 crore in case it loses the case. As the company has already agreed to pay Rs 700 crore in installments by March next year, the total outgo for the company could be a whopping Rs 6,450 crore.

The court also said that only Finland-based Nokia and its India subsidiary would be jointly liable for taxes, and not Microsoft. In addition, the high court also allowed Nokia and the I-T department to mutually settle the tax dispute.