The Income Tax Department has slapped a Rs 3,900-crore notice on Idea Cellular and its subsidiary, Aditya Birla Telecom, over transfer of assets and licences between the two companies in 2009.
Idea Cellular did not want to comment on the amount or the details of the case, saying the companies had received tax demands over a restructuring exercise approved by courts.
Idea did not disclose how much tax it was being asked to pay but said it believed the demands were “unjustified and based on erroneous interpretation of current tax laws”. It said it was evaluating options, including challenging the tax demand. “The demands are inconsistent with established tax laws and past precedents,” it said.
The I-T department had labelled the licence, asset and liability transfers as “slump sale” and said it resulted in capital gains. A slump sale is sale of assets in a lump sum, without assigning a value to assets and liabilities.
While Idea was slapped with a tax notice of Rs 1,500 crore, Aditya Birla Telecom got a notice for Rs 2,400 crore.
“These demands are misplaced and no tax is applicable. Idea Cellular has always maintained the highest standard of tax compliance. The company is evaluating all options, including challenging the demand at the appropriate forums,” the company said. A company official said the transfer of licences had been approved by the high court and legalities were in place.
The stock of Idea today fell by 2.7 per cent to close at Rs 103, after the development became public.
Idea had posted a 14 per cent increase in consolidated net profit, to Rs 228.57 crore, for the quarter ended December 31.