| Vodafone gets stay on I- T demand |
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Mumbai, 27 December The Income Tax Appellate Tribunal (ITAT) gave a stay order on Friday regarding the ₹ 3,700- crore tax demand made on Vodafone Plc. The final assessment on the company's transfer pricing had included interest on the tax; it was made earlier this month. Officials said ITAT gave a six- stay on the order. However, Vodafone will have to pay ₹ 100 crore by January 15 and another ₹ 100 crore by February 15. It will also also have to give corporate guarantees worth ₹ 3,500 crore. "Vodafone can confirm that the Income Tax Appellate Tribunal ( ITAT) has granted a stay of execution of the Transfer Pricing Order which Vodafone received in December 2011," the company said. "Vodafone maintains that there is no tax payable on this transaction and will continue to strongly defend its position against this order." The order was on the companys Pune outsourcing unit, which had transferred some shares to the parent company. This, the I- T department believes, did not comply with the transfer pricing rules, that deals between related parties should be at arms- length pricing. The order was passed for a share transfer done in 2008- 09. Vodafone maintains the transaction was a share subscription and not a share sale. It also believes share subscriptions are not covered by transfer pricing rules, either in India or abroad. " The I- T departments claim has no basis in law," it had said. The department has another case on the same matter, pending on the same issue. This related to the tax assessment year of 2009- 10. Both cases were heard by the high court here and referred back to the DRT; the court felt such technical matters should be dealt by the tax authorities. Vodafone is also mired in a much bigger issue, on which the demand is for tax payment of ₹ 11,200 crore. In 2007, it bought a 67 per cent stake in Hutchison Essar; the department has claims for a capital gains tax. Granted 6- month relief, subject to interim payments and guarantee, on ₹ 3,700- cr demand for alleged transfer pricing in FY09 GIREESH BABU Chennai, 27 December The high court here has asked Aircel Ltd to approach the tax appellate authority with its dispute against the state commercial tax department, related to the company's sale of tower assets to GTL Infrastructure in 2010. The bench of judges N Paul Vasanthakumar and P Devadass dismissed the appeal of Aircel and its arm, Dishnet Wireless, against the department, and upheld last month's order of a single judge on the issue. "The appellants have to approach the appellate authority under Section 51 of the Tamil Nadu Value Added Tax Act, 2006. Both writ appeals are dismissed. The common order of the learned single judge dated November 28, 2013 is confirmed," the division bench said in its order. An email sent to Aircel Ltd, seeking its comment on the order did not elicit aresponse. Approach tax appellate authority on GTL dispute: Madras HC to Aircel THE TRANSFER PRICING SAGA 2007- 08: Vodafone India Services issues shares to Mauritius- based group company 2008- 09: I- T department sends a notice on the transfer pricing issue DECEMBER 2011: I- T department issues draft transfer pricing order to Vodafone FEBRUARY 2012: Vodafone challenges the jurisdiction of transfer pricing order in Bombay HC FEBRUARY 2013: IT department sends assessment order FEBRUARY 2013: Vodafone says order has no basis in law as it relates to share subscription and not sale SEPTEMBER 2013: Bombay HC dismisses Vodafones petition DECEMBER 18: IT department sends ₹ 3,700 crore final tax assessment order DECEMBER 29: ITAT gives a six- month stay on I- T department's order |
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