The Bombay High Court has fixed January 30 for further hearing on a petition filed by Income Tax department challenging a recent order of the Appellate Tribunal which stayed the tax demand of Rs 3,700 crore on Vodafone India Services in an alleged transfer pricing case. Also Read - FIR filed against Twitter India again, now over child pornography content
The petition was mentioned yesterday by Income Tax counsel Beni Chatterjee and Vodafone lawyer Fereshte Sethna before a bench headed by Chief Justice Mohit Shah. The department had slapped a demand of Rs 3,700 crore on Vodafone for Financial Year 2008 which was a fall out of an earlier transfer-pricing order seeking to add Rs 8,500 crore to the taxable income of the company from the deal that involved it selling its BPO unit to an offshore entity. The company challenged the demand before the Appellate Tribunal.
Transfer pricing refers to the actual price at which a transaction takes place between two related parties, usually belonging to the same group. On December 27, 2013, the Appellate Tribunal had stayed the I-T tax demand for six months or till the final disposal of the plea, whichever is earlier.
The tribunal also directed Vodafone India Services to make an initial deposit of Rs 200 crore. The first installment of Rs 100 crores was to be paid by January 15 and the second installment of the equal amount is due by February 15.
Vodafone was also directed by the tribunal to provide corporate guarantees for the balance tax amount of Rs 3,500 crores by February 15.