The Bombay High Court today adjourned to July 8, the hearing on an appeal filed by Vodafone International in a dispute over tax liability. The court also stayed the ruling passed by the I-T department on May 31. The dispute is over the tax liability of Vodafone after it acquired Hutchison International’s stake in Hutchison- Essar in a USD 11.1-billion deal in 2007.
On May 31, the Income Tax held in a ruling that it had the jurisdiction to tax the transaction. The tax liability of Vodafone is estimated to be around USD 2 billion.
The tax department’s case is that Hutchison made capital gains in the deal, and while paying the purchase amount to Hutchison, Vodafone should have deducted tax on it.
The department had issued a show-cause notice to Vodafone in 2007, which was challenged before the Bombay High Court.
Source: PTI
The Income Tax Department has rightly taken up the issue, but I am not so clear if they have solid statutory backing. Let the facts of the case be clear. Would someone who has access to the I.t. proceedings, please spell out the facts, the issues and legal provisions invoked by the Assessing Officer.
Let it be debated in this forum, lest the case ends in a whimper like the Bhopal Gas case.