The Income Tax Appellate Tribunal (ITAT) has granted a stay order on the Rs 3,700-crore tax demand made by the authorities in relation to Vodafone’s call centre business.
“Vodafone can confirm that the Income Tax Appellate Tribunal has granted a stay of 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 the order,” the company said in a statement. Though the company did not specify the duration, sources said the stay has been granted for a period of six months.
The case relates to the transfer pricing order for assessment year 2008-09 in connection with the sale of the call centre business to Hutchison Whampoa Properties India Ltd, and the “assignment of call options” to Vodafone International Holdings BV.
Transfer pricing relates to the practice of pricing for transactions between a group’s companies based in different countries to ensure that a fair price - one that would have been charged to an unrelated party - is levied.
The final assessment order by the Income Tax authorities was made earlier this month. The company had said it would contest the department’s notice seeking Rs 3,700 crore relating to its call centre business.