In a major setback to Netherlands-based Vodafone, the Supreme Court
directed M/S Vodafone to respond to the Income Tax Department notice,
demanding two billion dollars as capital gained tax in 10 billion
dollar-Vodafone-Hutch deal of February 2007.
A bench comprising Justices S B Sinha and M K Sharma disposed off the petition filed by Vodafone challenging the jurisdiction of Indian Income Tax Authorities to demand capital gains tax.
Vodafone in its petition had contended that since both the parties are foreign companies and the deal had also taken place abroad, Income Tax authorities in India are not competent to raise any such demand.
The apex court has however directed the petitioner company to raise all these objections before the income tax authorities and if the companies was still aggrieved it could approach the Bombay High Court.
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