Prepaid Tax
SC upholds HC order asking tax dept to refund INR 11 bln to Vodafone Idea
This story was originally published at 20:29 IST on 20 January 2025
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--SC upholds HC order asking tax dept to refund INR 11 bln to Vodafone Idea
NEW DELHI – The Supreme Court Monday upheld a Bombay High Court order asking the tax department to refund prepaid tax of INR 11.28 billion to Vodafone Idea Ltd. for the assessment year 2016-17, which the telecom company had paid in excess.
The case has its genesis from a return of income filed by Vodafone Idea for the assessment year 2016-17. The return of income had disclosed a loss of INR 47.50 billion under the Act and a book loss of INR 2.93 billion under Section 115JB of the Income Tax Act, 1961. The department then issued notice under Section 143(2) of the Act to Vodafone Idea. Since transactions of Vodafone Idea involved international and specified domestic transactions with its associated enterprises, a reference was made under Section 92CA(1) of the Act to the transfer pricing officer to determine arm's length price for the relevant assessment year.
In 2019, the transfer pricing officer passed an order suggesting an upward adjustment of INR 19.26 billion in Vodafone Idea's income. Thereafter, the assessing officer passed a draft order and proposed various additions and disallowances for the assessment year 2016-17. Vodafone Idea then filed an objection before the dispute resolution panel in 2020.
In 2021, the panel issued directions under Section 144C(5) of the Act, which were uploaded on the Income Tax Business Application portal the same day. Vodafone Idea said the assessing officer had failed to pass the final order in terms of the panel’s direction within 30 days, the period of limitation under the Act. The company said the return of income originally filed had to be accepted and the excess tax paid had to be refunded by the department.
On Monday, shares of Vodafone Idea ended 9.1% higher at INR 9.94 on the National Stock Exchange. End
Reported by Surya Tripathi
Edited by Rajeev Pai
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