Vodafone moves SC against tax order

British telephone major Vodafone today moved the Supreme Court challenging a Bombay High Court order.

British telephone major Vodafone today moved the Supreme Court challenging a Bombay High Court order that upheld the Income Tax Department’s demand for the company to pay Rs 12,000 crore in tax on its cross-border deal with Hong Kong-based Hutchison in 2007.

The Bombay High Court had last week dismissed Vodafone International’s petition challenging the Indian tax authorities’ demand of Rs 12,000 crore in tax over the Hutchison deal.

The transaction has sufficient nexus with India and the IT has the jurisdiction to levy tax on the transaction, Justice Dhananjay Chandrachud and Justice J P Deodhar had noted while delivering the verdict.

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Vodafone,fighting a tax bill in India from its 2007 purchase of Hutchison Whampoa Ltd’s mobile business in the country,had filed an appeal with the high court in June challenging the tax department’s jurisdiction over the bill.

The Income Tax department has held Vodafone liable for not deducting tax at source from payment made to Hutchison.

Dismissing the challenge,the court,however,gave liberty to Vodafone to argue before the tax department that no penalty should be imposed as they genuinely believed they had no liability to deduct tax at source.

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