The Income Tax Department has withdrawn the ₹8,500-crore transfer pricing case against Vodafone India Services, in connection with sale of its Ahmedabad-based call centre business, 3 Global Services, to Hutchison Whampoa Properties (India) during the financial year 2008.
The Commissioner of Income Tax submitted a request to withdraw the case before a Supreme Court bench headed by Chief Justice B.R. Gavai, which granted permission for the withdrawal.
The bench ruled that the Income Tax Department had exceeded its jurisdiction by applying transfer pricing provisions without any cross-border element involved. As a result, the ₹8,500-crore tax demand was set aside.
The withdrawal comes days after the top ordered the union government to extend relief to Vodafone Idea Ltd on issues relating to its AGR dues.
In 2008, the I-T department alleged that Vodafone had engaged in an undisclosed international transaction. Tax officials had claimed the company had underreported its income by ₹8,500 crore through transfer pricing adjustments. The case reached the Supreme Court in 2016, but there was little movement for years before it was withdrawn on Monday.
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