The Supreme Court is scheduled to take up on January 23, telecom major Vodafone?s appeal challenging the Bombay High Court judgment on the $ 2 billion income tax case against the company. The company had filed an appeal with the Supreme Court earlier this month.
The Bombay High Court in its ruling on December 3 last year had upheld the income-tax department?s show cause notice asking Vodafone to pay nearly $2 billion for its acquisition of Hutchison. But granting a temporary relief to the telecom company, it had continued a previous stay on the I-T department?s show cause notice for another eight weeks.
While it is just a preliminary hearing, the income tax department is expected to ask the Supreme Court to withdraw the stay order on the show cause notice. This will allow the department to initiate scrutiny of the acquisition.
The case refers to the February 2007 by Vodafone International Holdings BV of a 52% stake in Hutchisson Essar (now Vodafone Essar) for $ 11 billion. Following this, the income tax department had sent two show cause notices to the telecom company to pay $ 1.7 billion as capital gains tax.
The company may now have to cough up about $1.7 billion as capital gains tax for its acquisition of a 52% stake in Hutchisson Essar (now Vodafone Essar) in 2007, a deal priced at $ 11 billion.
Vodafone however refused to divulge details of the deal to the department. It also filed a writ petition in the Bombay High Court on the grounds that the tax department had no jurisdiction over a deal between two parties incorporated overseas.