The income-tax (I-T) department has jurisdiction in the Rs8,500 crore transfer-pricing tax dispute involving the sale of its call centre business to Hutchison in 2007
The Income Tax Appellate Tribunal (ITAT) has ruled that that the income-tax (I-T) department has jurisdiction in the Rs8,500 crore transfer-pricing tax dispute involving the sale of its call centre business to Hutchison in 2007.
''Assessee's (Vodafone India) appeal is partly allowed. But according to us, this is an international transaction and the assignment of call option took place,'' the 2 judge ITAT bench said.
ITAT was hearing a plea of Vodafone India Services, made in 2012, challenging the jurisdiction of the tax department in issuing a draft transfer-pricing order that sought to add Rs 8,500 crore to Vodafone's taxable income for FY08.
The order came after the Bombay High Court had refused to intervene in the matter earlier and asked the Tribunal to hear the case on a day-to-day basis. The matter will now go back to the HC as Vodafone can appeal against the ITAT order. The I-T department had asked Vodafone to cough up Rs3,700 crore as tax last year for sale of its call centre business to Hong Kong-based Hutchison in 2007. However, in that case the Bombay HC had ruled in Vodafone's favour and dismissed the IT department's claim.
This case is separate from the other major tax battle Vodafone has been fighting, which involved a tax liability of another Rs3,200 crore. But this claim was earlier dismissed by the Bombay HC.
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