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By Maulik Vyas, ET Bureau\n
MUMBAI: The Bombay High Court<\/a> has directed British telecom giant Vodafone Plc<\/a>’s Indian subsidiary to approach the Dispute Resolution<\/a> Panel (DRP) with its petition against the Income Tax<\/a> department’s demand of Rs 1,300 crore.
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\nThe court has given Vodafone two weeks to file its petition before the panel.
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On Friday, the division bench comprising Chief Justice Mohit Shah and Justice MS Sanklecha while disposing the petition filed by Vodafone India Services<\/a> (VISPL) directed DRP to give its ruling within two months of filing of the appeal.
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\nMeanwhile, the court will hear the petition filed by the Anglo Dutch oil major Shell Plc’s Indian subsidiary on December 11, where the Indian entity is facing a tax liability of about Rs 15,000 crore on similar grounds.
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\n“The petitioner (Vodafone India) feels harassed because no opportunity was given to the company by revenue authorities,” observed the division bench and said that the DRP will consider preliminary applicability of Chapter X (relating to the Transfer Pricing provisions) within 2 months. “The petitioner can approach court back if they have still any reservations.”
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\nIncome Tax department raised a red flag when Vodafone India issued shares to its Mauritius affiliate for Rs 246 crore at a fair market value of Rs 8,519 a share, for a transaction made during the assessment year 2008-09.
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\nThe tax department claimed that the fair market value was Rs 53, 775 a share. The differential amount is being sought to be taxed by the department as income in the hands of the company.
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“The court passed remarks on the manner in which tax proceedings took place” said Dinesh Kanabar, Deputy CEO, KPMG<\/a> India. “This is a very satisfactory ruling as court the has directed DRP to consider the preliminary matters on the basis of merits and a specific deadline has been set to deliver the Order. Vodafone has been given the liberty to approach the Court thereafter, if needed,\" Kanabar added.
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The DRP was set up in 2009 to deal with income tax related transfer pricing disputes. It was largely meant to sort out tax assessments of foreign firms. The transfer pricing is the practice<\/a> of arm’s length pricing for transaction between group companies to ensure that a fair price is levied.
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\n“Prima facie, the share capital or premium received for issue of shares by an Indian company should be considered a capital receipt and not taxable in India,” says Ravishankar Raghavan, Principal –Tax Group, at corporate law firm Majmudar & Partners. “What the tax department is trying to do is to bring that transaction into the transfer pricing ambit as an international transaction which includes capital financing, thereby making a transfer pricing adjustment.”
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\nTransfer pricing provisions in a cross border transaction will not apply unless there is an ‘income’ which is arising in such transaction between two related enterprises where at least one of whom is a non-resident.
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\n“It will be interesting to wait for the finding of the DRP on whether the subscription to the share capital of the Vodafone Group entity in India resulted in any notional ‘income’ in the hands of the Indian entity,” said Sanjay Sanghvi, Partner, Khaitan & Co.\n\n<\/body>","next_sibling":[{"msid":26556314,"title":"Ericsson ready to co-operate in CCI probe","entity_type":"ARTICLE","link":"\/news\/industry\/ericsson-ready-to-co-operate-in-cci-probe\/26556314","category_name":null,"category_name_seo":"industry"}],"related_content":[],"seoschemas":false,"msid":26590983,"entity_type":"ARTICLE","title":"Bombay High Court refers Vodafone share sale dispute to tax panel","synopsis":"The Bombay HC told Vodafone to submit its objections to a tax claim to the tax authorities' Dispute Resolution Panel.","titleseo":"industry\/bombay-high-court-refers-vodafone-share-sale-dispute-to-tax-panel","status":"ACTIVE","authors":[{"author_name":"Maulik Vyas","author_link":"\/author\/479185842\/maulik-vyas","author_image":"https:\/\/etimg.etb2bimg.com\/authorthumb\/479185842.cms?width=250&height=250","author_additional":{"thumbsize":false,"msid":479185842,"author_name":"Maulik Vyas","author_seo_name":"maulik-vyas","designation":"Editor","agency":false}}],"Alttitle":{"minfo":""},"artag":"ET Bureau","artdate":"2013-11-29 19:10:00","lastupd":"2013-11-29 20:23:08","breadcrumbTags":["Bombay high court","Vodafone Plc","Vodafone India Services","industry","resolution","Income Tax","KPMG","the practice"],"secinfo":{"seolocation":"industry\/bombay-high-court-refers-vodafone-share-sale-dispute-to-tax-panel"}}" data-authors="[" maulik vyas"]" data-category-name="Industry" data-category_id="18" data-date="2013-11-29" data-index="article_1">
由Maulik Vyas以及等孟买:孟买高等法院已经指示英国电信巨头沃达丰股价印度子公司接近争端决议面板(DRP)请愿反对所得税部门的需求的1300卢比。
法院给了沃达丰两周提交请愿书前面板。
上周五,该部门长椅上由首席大法官Mohit沙和正义Sanklecha女士同时处理提交的请愿书沃达丰印度服务(VISPL)直接复制在两个月内给裁决提起上诉。
与此同时,法院将听到的请愿书英美资源集团荷兰石油巨头壳牌的印度子公司12月11日,在印度实体面临大约15000卢比的纳税义务类似的理由。
“请愿者(沃达丰印度)感觉骚扰,因为没有机会给公司的收入,”观察到分裂台上,说章X的组成将考虑初步的适用性(有关转让定价规定)在2个月之内。“请愿者可以法院如果他们仍然有任何保留。”
收入税务部门提出了一个红旗时,沃达丰印度发行股票的毛里求斯分公司的公允市场价值246卢比每股8519卢比,事务在评估2008年- 09年。
税务部门声称公允市场价值是Rs 53, 775。微分数量正在寻求征税部门收入的公司。
“法庭通过评价税务诉讼的方式发生“Dinesh Kanabar说,副总裁,毕马威(KPMG)印度。“这是一个非常令人满意的判决法院已经指示DRP考虑初步的重要优点的基础上,和一个特定的期限已经将交付订单。沃达丰已自由接近法院之后,如果需要,”Kanabar补充道。
复制2009年成立处理所得税相关的转让定价争议。它在很大程度上是为了解决税收对外国公司的评估。转让定价是这种做法集团公司之间的公平交易的定价,以确保一个公平的价格。
“初步,股本溢价或收到了一家印度公司在发行股票应考虑资本收据而不是应税在印度,“Ravishankar Raghavan说主要税收集团公司律师事务所Majmudar & Partners。“税务部门要做的是将事务到转让定价范围作为国际事务包括资本融资,从而使转让定价调整。”
转让定价规定跨境交易将不适用,除非有一个“收入”是产生在这样两个相关企业之间交易,至少其中一个是一个非居民。
“这将是有趣的等待发现DRP是否认购的股本沃达丰集团实体在印度导致任何名义“收入”的印度实体,“Sanjay Sanghvi说,伙伴,比& Co。
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