Vodafone like deals under govt scanner for tax evasionBy IANS
Monday, September 13, 2010
NEW DELHI - Buoyed by the Bombay High Court’s recent favourable verdict on Vodafone’s tax liability case, the government has started examining similar merger and acquisition deals for possible tax evasion.
Vodafone type of deals are being closely scrutinised from tax evasion point of view and quite a good number of such cases are in the process of finalisation to make sure that the government does not lose its legitimate revenues, Chairman of Central Board of Direct Taxes S.S.N. Moorthy said Monday.
The Bombay High Court last week set aside Vodafone’s petition challenging the tax liability of $2.6 billion towards capital gains in its $11-billion acquisition of Hutchison Whampoa’s 67-percent stake in India.
Moorthy said there is no plan to serve a show-cause notice to Vodafone and the company would be given eight weeks time to abide by the court verdict.
“Thereafter, CBDT would insist upon recovering the evaded tax amount even if the company threatens to move the Supreme Court,” Moorthy said at an Assocham event.
Though the CBDT chairman refused to specify the companies under scanner for the possible tax evasion, it is believed that the government is examining companies like breweries giant SABMiller, GE and AT&T for their acquisitions in India over the past few years.
– Indo-Asian News Service