Income Tax Department Drops ₹8,500 Crore Transfer Pricing Case Against Vodafone

In a significant legal development, the Income Tax Department has withdrawn its ₹8,500 crore transfer pricing case against Vodafone India Services Pvt. Ltd., providing relief in a long-running dispute that stretches back to the financial year 2008, as per the news reports.

₹8,500 Crore Transfer Pricing Battle

The case originated from Vodafone India’s sale of its Ahmedabad-based call centre business, 3 Global Services Pvt. Ltd., to Hutchison Whampoa Properties (India) Ltd as an internal restructuring exercise. 

In 2012, the tax authorities alleged unpaid taxes due to what they identified as an international transaction involving intangible rights and call options, leading to a tax demand of ₹8,500 crore. This claim was based on the argument that the sale did not happen at arm’s length pricing.

High Court Support for Vodafone’s Domestic Transaction Stand

Vodafone challenged the Income Tax Appellate Tribunal's ruling, asserting that the transaction was purely domestic and did not fall within the ambit of international transfer pricing regulations. In October 2015, the Bombay High Court sided with Vodafone and quashed the tax demand, stating that the deal involved two Indian entities and carried no cross-border elements.

Supreme Court Files Closed, Years Later

Although the department escalated the matter to the Supreme Court in 2016, the case saw no progress and remained dormant. On June 24, 2024, a plea to withdraw the case was accepted by a bench led by Chief Justice B.R. Gavai, marking an end to years of uncertainty.

Read More: Vodafone Idea Share Price Jumps 10% After Supreme Court Allows Government to Reconsider AGR Dues!

Link Between AGR Dues Relief and Case Withdrawal

The withdrawal comes close after the Supreme Court clarified its AGR dues order, allowing the government to reassess Vodafone Idea’s total dues as of FY17, including penalties and interest. This move, aimed at aiding the cash-strapped telecom firm, may have influenced the timing of dropping the transfer pricing dispute as well.

Vodafone Idea Share Price Performance

On November 4, 2025, Vodafone Idea share price opened at ₹9.73 on NSE, above the previous close of ₹9.54. During the day, it surged to ₹9.76 and dipped to ₹9.52. The stock is trading at ₹9.56 as of 11:21 AM. The stock registered a marginal change of 0.21%.

Over the past week, it has moved up by 2.14%, over the past month, it has moved up by 12.87%, and over the past 3 months, it has moved up by 39.77%.

Conclusion

The closure of the ₹8,500 crore transfer pricing case signifies a favourable outcome for Vodafone after a prolonged legal struggle. With the added relief on AGR dues, the company now has a clearer financial path and fewer legal hurdles.

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in securities are subject to market risks. Read all related documents carefully before investing.