MUMBAI, Oct 8 (Reuters) - A Mumbai court has ruled in favourof Vodafone in one of a series of tax cases involvingthe British telecoms company in India, a decision seen aspositive for several other firms fighting similar disputes.
The Bombay High Court backed Vodafone's efforts to oppose amove by tax authorities to add 85 billion rupees ($1.3 billion)to the taxable income of a unit, Vodafone India Services PvtLtd, which provided call centre services to some groupcompanies.
It had initially received a tax claim of about $600 million.
Vodafone, one of India's largest corporate investors, hasrepeatedly clashed with the authorities over taxes since itbought Hutchison's mobile business in 2007. It was held liablefor capital gains tax which authorities say is owed on the deal.
A dispute over a capital gains tax demand worth more than $2billion related to that deal has yet to be resolved.
Vodafone's treatment, seen by many investors asheavy-handed, had fuelled debate over India's unpredictablerules and regulations.
The Bombay High Court had separately ruled in favour of thegroup last year in a transfer pricing tax dispute. In that case,India's tax office had accused Vodafone India Services Pvt Ltdof under-pricing shares in a rights issue to its parent, and haddemanded tax of about 30 billion rupees.
The government, seeking to clean up a reputation for "taxterrorism", decided to not appeal that case.
Transfer pricing is the value at which firms trade products,services or assets between units across borders, a regular partof doing business for a multinational.
Several other multinationals including IBM Corp,Royal Dutch Shell Plc and Nokia Oyj are alsofighting transfer-pricing cases in India.
Vodafone said in a statement that it welcomed the latestcourt ruling. It did not comment further.($1 = 65.0800 Indian rupees) (Reporting by Nivedita Bhattacharjee in Mumbai; Editing byKeith Weir)
Vodafone (VOD)
