New Delhi: The Supreme Court on Friday pronounced its judgement on Vodafone International Holdings' appeal and said that the Indian tax authorities have no jurisdiction over transactions outside India. The Indian tax authorities will have to return Rs 2,500 crore to Vodafone.
The Supreme Court ruled by a majority decision that capital gains tax is not applicable in Vodafone case and the money deposited by Vodafone will have to be refunded by the government with an interest rate of 4 per cent for two months.
Vodafone counsel Harish Salve said, "The Supreme Court has upheld the that genuine structuring is permissible and this judgement has cleared the air."
Vodafone had challenged the income tax demand of Rs 11,000 crore on the overseas deal between Vodafone and Hutchison.
Vodafone had moved the apex court challenging the Bombay High Court judgement of September 8, 2010 which had held that Indian IT department had jurisdiction over the deal.
Through the $11.2 billion deal in May 2007, Vodafone acquired 67 per cent stake in the Hutchison-Essar Ltd (HEL) from Hong Kong-based Hutchison Group through companies based in Netherlands and Cayman Island.
With Additional Inputs from PTI