The Central Board of Direct Taxes (CBDT) will give its views on the high court order on Vodafone transfer pricing case after studying the judgement, chairman K V Chowdary said on Monday.
“We are examining transfer pricing issue at both the (Income Tax) commissioner and Central Board of Direct Taxes (CBDT) levels. We will take a view shortly,” he told the news agency.
He said that all relevant issues would be considered and the department has also sought advice from the law Ministry in the matter.
On Friday, the Bombay High Court ruled in favour of Vodafone, saying that the British telecom giant is not liable to pay Rs 3,200 crore demanded by the Income Tax department in a case related to transfer pricing.
The Income Tax department had charged Vodafone India additional income tax alleging that it had undervalued its shares in its subsidiary Vodafone India Services, while transferring them to its parent company in Britain. The transaction took place in FY2010.
Transfer pricing is the practice of arm’s length pricing for transactions between group companies based in different countries to ensure that a fair price —- one that would have been charged to an unrelated party —- is levied.