News
Income Tax Department Withdraws INR 8,500 Crore Transfer Pricing Case Against Vodafone Before Supreme Court
05 Nov 2025
- DMD Advocates
- Matter Reporting
The Income Tax Department has withdrawn its long-pending INR 8500 crore transfer pricing appeal against Vodafone India Services Pvt. Ltd., bringing an end to litigation that has been ongoing since 2016 in the Supreme Court. The withdrawal was permitted by the Supreme Court after the Department filed an application seeking withdrawal of the appeal.
The dispute arose from FY 2007–08 following Vodafone’s sale of its Ahmedabad-based call centre business, formerly known as 3 Global Services Private Limited, to Hutchison Whampoa Properties (India) Limited as part of an internal restructuring. The department alleged that the transaction involved the transfer of call options and intangible rights of commercial value to a related entity, qualifying it as an international transaction under Indian transfer pricing rules. On this basis, the department sought to add INR 8500 crore to Vodafone’s taxable income, alleging that the sale had not been conducted at an arm’s-length price.
In October 2015, the Bombay High Court ruled in favour of Vodafone, setting aside the ITAT’s order and quashing the tax demand. The Court observed that the transaction was domestic in nature, involving two Indian entities, and lacked any cross-border element necessary to invoke transfer pricing provisions. The Court concluded that the income tax department had overreached by invoking transfer pricing provisions in the absence of a cross-border component.
The Income Tax Department challenged the High Court’s ruling before the Supreme Court in 2016. The appeal, however, remained pending for nearly a decade before being withdrawn.
Vodafone India Services Pvt. Ltd. was represented by DMD Advocates, led by Ms. Fereshte Sethna, Founder & Managing Partner, Mumbai, and Ms. Anuradha Dutt, Founder & Managing Partner, Delhi, along with Mrunal Parekh, Partner, Sherry Goyal, Associate Partner, and Associates Prakalathan Bathey, Mohit Tiwari, Naomi Ting, Sushmita Chauhan, and Tarang Saraogi.
