The Supreme Court has rejected the income tax (I-T) department plea seeking to proceed against Vodafone Essar Gujarat Limited in relation to transfer of passive assets to one of its group companies, Vodafone Essar Infrastructure Limited.
Earlier in November 2014, Vodafone Essar Gujarat had approached the Supreme Court opposing the I-T Department?s petition, which challenged Gujarat High Court?s (HC) August 2012 order that approved the demerger scheme regarding its passive infrastructure. As per the scheme, the company and its six associate transferred its passive infrastructure worth Rs 150 billion to the group firm, Vodafone Infrastructure and subsequently amalgamated it with Indus Tower.
The I-T department had challenged this scheme with the view that through the scheme Vodafone intended to avoid capital gains tax of Rs 35 billion and stamp duty of Rs 6 billion. It had further asserted that the move was the first step in an alleged tax avoidance arrangement prior to this entity?s amalgamation with Indus Towers.
In this regard, Vodafone had stated that the demerger scheme sanctioned by the high court had been completed and therefore, the department?s appeal had become infructuous.
