Bombay HC Ruled in Favour of Vodafone in Rs 8,500 Cr Tax Case
In a relief to Vodafone India, the Bombay High Court on Thursday ruled in favour of the British telecom giant in the 8,500 crore transfer pricing tax dispute, reported NDTV. The case involves the sale of its call centre business to Hutchison and assignment of call options to Vodafone International BV in 2007-08.
The court’s decision comes as a shot in the arm for Vodafone, as the verdict comes after the Income Tax Appellate Tribunal ruled against the company last year.
Transfer pricing is the value at which firms trade products, services or assets between units across borders, a regular part of doing business for a multinational.
Vodafone India moved the Bombay High Court in February 2012 challenging the jurisdiction of the tax department in issuing a transfer-pricing order that sought to add Rs.8,500 crore to its taxable income for 2007-2008.
Vodafone has maintained that the transaction is not an international transaction and so it should not attract tax. In 2013, the tax department had issued a demand notice of Rs.3,700 crore to Vodafone India in this case.
(With agency inputs)