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Vodafone gets relief in share sale trouble [Mail Today (India)](Mail Today (India) Via Acquire Media NewsEdge) THE Income Tax Appellate Tribunal stayed a ` 3,700- crore tax claim by the I- T Department on Vodafone India in a transfer- pricing dispute on Friday. The tribunal also asked the telecom giant to deposit ` 200 crore as initial payment and submit bank guarantees for the remaining sum. The tribunal, which granted a six- month stay to the British telecom major on the proceedings of tax authorities, did not accept the I- T Department's demand that the company be asked to deposit, at least, 50 per cent of the tax claim as a precondition to obtain a stay. The case relates to Vodafone's issue of shares of its Punebased BPO arm Vodafone India Services to Vodafone Teleservices Mauritius in 2007- 08, which according to the I- T Department was grossly undervalued. The department made the claim in 2010- 11 saying the deal was undervalued by about ` 1,300 crore. Transfer pricing is the practice of arm's length pricing for transactions between a Group's companies based in different countries to ensure a fair price— one that would have been charged to an unrelated party— is levied The department claimed ` 3,700 crore in tax arrears and penalties from Vodafone, which had argued that the transaction was a capital receipt and hence tax could not be levied on the amount. Abhishek Manu Singhvi, appearing for Vodafone, had argued that the Supreme Court order of 2011 had upheld Vodafone's position with respect to there being no assignment of call options and hence no question of taxable income. He also argued that with respect to the sale of the call centre business, that the transaction in question was between two Indian companies and that the transfer pricing officer had no jurisdiction over the transaction. The company claimed the case did not fall within the transfer pricing ambit and they are not liable to pay tax. The I- T Department, on the other hand, argued that the stay application was not maintainable as other legal remedies, by way of an appeal before the assessing officer or CIT appeals, had not been exhausted. Vodafone spokesman Ben Padovan said that the company owes no dues to the government and will defend itself at appropriate fora. " Vodafone maintains that there is no tax payable on this transaction and will continue to strongly defend its position against this order," Padovan said. The case relates to Vodafone's issue of shares of its Punebased BPO arm Vodafone India Services to Vodafone Teleservices Mauritius in 2007- 08 (c) 2013 India Today Group. All Rights Reserved. Provided by Syndigate.info, an Albawaba.com company |