The Indian Income Tax Department has approached the Bombay High Court against a decision by the Income Tax Apellate Tribunal (ITAT) to stay a tax demand worth Rs 37 billion on Vodafone India.
The case relates to the transfer pricing order regarding the sale of the operator?s call centre business to Hutchison Whampoa Properties India Limited and the assignment of call options to Vodafone International Holdings BV in 2007.
Earlier, on December 27, 2013, the tribunal had stayed the Indian Income Tax Department?s tax demand of Rs 37 billion on Vodafone India for six months or till the final disposal of the petition. The ITAT had directed the operator to make an initial deposit of Rs 2 billion. The first installment of Rs 1 billion was to be paid by January 15, 2014 and the second installment of
Rs 1 billion was to be paid by February 15, 2014. Besides, the tribunal had directed Vodafone India to provide corporate guarantees for the balance tax amount of Rs 35 billion by February 15, 2014.
Earlier, in an order dated December 2011, the Indian Income Tax Department had asked Vodafone India to add Rs 85 billion to its taxable income, thus, raising the tax liability of the company. Subsequently, the department had issued a final assessment order and a notice of demand providing the company with 30 days to comply with its order or approach appropriate authority for relief. However, having received the final assessment order, Vodafone India approached the ITAT for relief.
