Bombay HC grants Idea Cellular interim relief in Rs 1,500-cr tax case

Sep 13 2013, 10:24 IST
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In April, the I-T department had slapped a Rs 3,900-crore notice on Idea Cellular and its subsidiary Aditya Birla Telecom. In April, the I-T department had slapped a Rs 3,900-crore notice on Idea Cellular and its subsidiary Aditya Birla Telecom.
SummaryBombay HC grants interim relief to Idea Cellular in its Rs 1,500-crore tax case by staying an I-T department order.

The Bombay High Court on Thursday granted interim relief to Idea Cellular Ltd in its Rs 1,500-crore tax case by staying an I-T department order, reports fe Bureau in Mumbai. The HC has barred the department from initiating recovery proceedings against the Kumar Mangalam Birla-led group’s telecom arm until the Commissioner of Income Tax comes up with more clarity on the issue.

In April, the I-T department had slapped a R3,900- crore notice on Idea Cellular and its subsidiary Aditya Birla Telecom over alleged capital gains on transfer of assets and licences between the company and its subsidiary Aditya Birla Telecom in 2009. The I-T department had called the asset and liability transfers a ‘slump sale’. A slump sale is sale of assets in a lump sum, without assigning a value to assets and liabilities.

The court, which did not take a view on the merit of the case, has directed the I-T department to reconsider Idea Cellular’s plea. Idea had appealed to restrain the I-T department from beginning the recovery proceedings until the first appellate authority, or IT, comes out with more clarity.

An Idea spokesperson did not respond to an email seeking response.

Idea Cellular had challenged the ruling, maintaining that the I-T department order it received was unjust and based on an erroneous interpretation of current tax laws and facts of the case. The company had said that the demands by the I-T department were inconsistent with established tax laws and past precedents.

Last week, the high court had dismissed a writ petition filed by Vodafone India questioning the jurisdiction of a transfer pricing order issued by the income tax department. Idea Cellular shares closed at R163.65, down 2.6%, on Thursday on the BSE.

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