Income Tax Department is probing ABNL's purchase of AT&T stake in Idea

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I-Tax Department probing ABNL's purchase
Aditya Birla Nuvo, Ltd. (ABNL) recently filed a petition in the Bombay high court. This appeal was against the income tax department's demand from the company for the financial details to calculate the company's actual tax liability.

The income tax department has sent a notice to the company in 2009. The high court has given its judgment in favour of the tax department and has asked the company to do the required.

The court has ruled out the ABNL's petition, asking the company to furnish all the details so that the transactions done can be monitored by the tax department and the actual tax can be calculated.

This decision taken by the court is seen as a positive step. This would help in further strengthening the Income Tax department role in taking care of cross-border taxes and such issues related to Indian companies.

This entire tax issue is because of the deal in which ABNL paid $150 million to purchase 16% stake in Idea cellular India of AT&T. According to the company it has taken advance permission from the Income Tax Department regarding the non applicability of tax.

As the company AT&T is based in Mauritius and there is a tax treaty between India and Mauritius. The income tax department in response of this has said that the NOC cannot stop it from doing assessment on transactions and that the New Cingular Wireless Cellular the parent company of AT&T Mauritius, which is based in US has received the sale proceeds and not AT&T Mauritius.

Thus, stating that ABNL is liable for the tax payment. The decision taken by the court is seen as a positive step. This would help in further strengthening the Income Tax department role in taking care of cross-border taxes and such issues related to Indian companies.

Read more about: tax, high court, aditya birla, idea
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