Income Tax Department not to appeal against the Bombay High Court order in the Vodafone transfer pricing case

In a decision aimed at avoiding "fruitless litigation"  and improving the investment sentiment by allaying investors' concerns on tax issues, the Cabinet Committee on Economic Affairs (CCEA) on Wednesday took a decision not to challenge the judgment of the Bombay High Court that said that Vodafone was not liable to pay a tax demand of Rs. 3,200 crore in a transfer pricing case. 

  

The decision follows the advice given by Attorney General Mukul Rohatgi to the Income Tax Department not to prefer an appeal to the Supreme Court against the judgment of the Bombay High Court in the 'Vodafone transfer pricing case'. 

“The decision to not appeal against the Bombay High Court ruling that was in favour of Vodafone sends out the message to global investors whose confidence in India was shaken in the past… Prime Minister Modi wants it to be known that his government will take decisions that will be fair, transparent and within four corners of the law,” said Union Telecom Minister Ravi Shankar Prasad after the meeting of the Cabinet. 

The Bombay High Court in its October 10, 2014 order had given relief to the UK-based mobile service provider by ruling that it is not liable to pay an income tax demand of Rs 3,200 crore in a case relating to transfer pricing.