The Bombay High Court has adjourned the hearing of the income tax case involving the British telecom major Vodafone to October 29, after it came up for hearing today. The I-T department had earlier issued a show-cause notice to Vodafone-Essar, asking why capital gains tax should not be levied on the $11.1 billion Hutchison-Vodafone deal.The lawyer for Vodafone-Essar told Business Standard that the company would be filing an affidavit with the court on its stance on the I-T issue. He, however, did not divulge further details of the case nor the date for the filing.During his visit to the country, Vodafone CEO Arun Sarin had stated that the normal practice of filing I-T was done by the seller and not the buyer. The joint venture company Vodafone-Essar, on its part, has filed a writ petition in the Bombay High Court challenging the right of the tax authorities to levy a capital gains tax.The IT department found Vodafone guilty of not deducting tax at source (TDS) while paying Hutchison Telecommunications International (HTIL) for a majority stake in Hutchison Essar.Hutchison Essar was renamed Vodafone Essar after the telecom major bought 67 per cent in India's fourth-largest service provider for $11.2 billion earlier this year. Vodafone bought out CGP Investments, registered in the Cayman Islands, which was wholly owned by HTIL.Vodafone passed the buck on payment of tax of over $2 billion to HTIL, the former joint venture partner of the Essar group, stating taxes are to be paid by the seller. "Neither the Essar company, nor the Vodafone company, nor Vodafone-Essar (joint venture company) are party to it. Usually taxes are paid by the seller, and the seller is not any of the parties represented here", said Vodafone Group Chief Executive Officer (CEO) Arun Sarin on his recent visit to India.
