To deposit Rs.200 cr
The ruling comes after the Bombay High Court late last month asked the private telecom service provider to approach the tribunal to seek redressal in the tax claim case.
The tribunal, which granted a six-month stay on the proceedings by tax authorities, did not accept the I-T Department's demand that the company be asked to deposit at least 50 per cent of the Rs.3,700-crore tax claim as a pre-condition to obtain a stay. Vodafone spokesman Ben Padovan said the company owed no dues to the government. He asserted that it would defend itself at appropriate forums.
"Vodafone can confirm that the Income Tax Appellate Tribunal has granted a stay on execution of the transfer pricing order, which Vodafone received in December, 2011. "Vodafone maintains that there is no tax payable on this transaction and will continue to strongly defend its position against this order," Mr. Padovan told PTI in an e-mail.
The case relates to Vodafone's issue of 2.89 lakh shares of its Pune-based BPO arm Vodafone India Services, valued at about Rs.8,509 each, to Vodafone Teleservices Mauritius for Rs.246.38 crore in 2007-08, which, according to the I-T Department, was grossly undervalued.
The department made the claim in 2010-11, and said the deal was undervalued by about Rs.1,300 crore. The total cost of the shares worked out by the tax department is about Rs.1,550 crore, valuing the shares at Rs.53,775 each.
The department claimed Rs.3,700 crore in tax arrears and penalties from the Indian unit of the British telecom major. Vodafone had argued that the transaction was a capital receipt and, hence, tax could not be levied on this amount.