Another big positive news has aired today for Vodafone. This was about the Favorable Income Tax Ruling for Rs 795 Cr for V! Income Tax Appellate Tribunal nixes tax claim on Vodafone rights issue.
The Mumbai bench of the Income Tax Appellate Tribunal has deleted the addition of ₹795 crore by tax authorities as income received from nine Mauritian entities that subscribed to the company’s rights issue in assessment year 2006-07 in a relief to Vodafone India.
The assessing officer’s inability to question the identity, creditworthiness and genuineness of the transaction was justified by the tribunal stating that they were validated by the Supreme Court.
In their order of August 28, which was released on Monday, judicial members RL Negi and RC Sharma said, “It is abundantly clear the assessee has not only furnished irrefutable documentary evidence to establish identity and genuineness of shareholders, but has also established source of funds of such shareholders.” Since the assessee had fully discharged its onus, there is clearly no case of unexplained credit, they said in the order. The tribunal also said the Bombay High Court had settled that the Supreme Court’s judgement had to be taken into cognisance or else it would amount to ‘judicial indiscipline.’