DRP favours I-T dept in Rs 1300 cr Vodafone case

Adding to telecom major Vodafone’s woes, the Dispute Resolution Panel (DRP) has passed an order favouring the income tax department in the Rs 1,300 crore transfer pricing case versus the British telecom major’s Indian arm.

This issue goes back to FY10 when Vodafone had issued around 2,89,000 shares which were valued at around Rs 8500 per share aggregating to around Rs 246 crore to its sister entity, Vodafone Teleservices India Holding Mauritius.

The department’s transfer pricing officer had actually calculated that the price of the shares should have been actually Rs 53000 instead of Rs 8500. Basically what they were saying is that this deal was grossly undervalued.

Also read: Govt-Vodafone tax conciliation process breaks down: SourcesAccording to the department, the tax demand that had risen was around Rs 400 crore and Rs 13 crore tax order had been slapped on Vodafone. This was around three to four  months back. The company had moved the Bombay High Court and the Bombay High Court had asked Vodafone India services to move to DRP. DRP was give two months of time.