The Bombay High Court has granted relief to Idea Cellular in the Rs 15 billion income-tax case by directing the Income Tax Department of India not to initiate recovery processes against the operator. In addition, the court has directed the department to hear Idea Cellular?s application once again.
After the income tax commissioner looks into the matter, the case will be moved to the Income Tax Appellate Tribunal. The matter dates back to 2009, when Aditya Birla Telecom Limited (ABTL), demerged its telecom operations in Bihar circle with its holding company Idea Cellular.
According to the Income Tax Department of India, licence, asset and liability transfers resulted in capital gains to both ABTL and Idea Cellular. The department therefore issued a tax notice of Rs 15 billion on Idea Cellular and Rs 24 billion on ABTL in April 2013, following which Idea Cellular approached court.
