The transfer pricing department has approached the Central Board of Direct Taxes (CBDT) seeking clarity over the legal recourse in the Vodafone transfer pricing case. The transfer pricing department is yet to make adjustments on share issuances by Vodafone India services to Vodafone Teleservices Mauritius for assessment years, 2011 and 2012.
The move comes with the view to provide clarity on the transfer pricing case as the Bombay High Court’s ruling, which was in favour of Vodafone, will be binding on all subsequent transfer pricing orders if the tax department chooses not appeal. It has been reported that the transfer pricing officer can raise additional tax demands on Vodafone India before January 31, 2015.
In October 2014, the Bombay High Court had ruled that Vodafone was not liable to pay tax of Rs 32 billion in a transfer pricing case dating back to 2009-10. In this case, the tax authorities had alleged that Vodafone India, a group entity, had under-priced shares in a rights issue to its parent company, Vodafone Teleservices Mauritius.
