Now Reading: Hindustan Unilever wins Rs 29,000 crore tax case in Bombay High Court
-
01
Hindustan Unilever wins Rs 29,000 crore tax case in Bombay High Court
Hindustan Unilever on Friday won a Rs 29,000 crore tax dispute at the Bombay High Court, which ruled that a tax notice issued in 2021 for the 2018-19 assessment year was time-barred…
Hindustan Unilever on Friday won a Rs 29,000 crore tax dispute at the Bombay High Court, which ruled that a tax notice issued in 2021 for the 2018-19 assessment year was time-barred under the Income Tax Act. The case stems from an indirect transfer of shares involving Unilever's global reorganisation of its spreads business. The tax department had demanded capital gains tax on the transaction.
The court accepted Hindustan Unilever's argument that the reassessment notice was issued beyond the six-year limit for cases involving assets worth over Rs 50 lakh. The company had argued the question was now settled under the 2012 retrospective amendment. The department is expected to appeal to the Supreme Court.
Indian Opinion Analysis
The Hindustan Unilever case shows a Supreme Court that has been willing to scrutinise the tax treatment of cross-border share transactions closely. In 2012, the court held that a transfer of shares between two foreign companies could still be taxed in India if the underlying assets were in India, which was the essence of the Vodafone ruling the 2012 amendment tried to undo. The Rs 29,000 crore at stake is one of the largest direct-tax demands ever litigated, and the outcome will set a precedent for dozens of similar cases involving indirect transfers by multinationals. The Income Tax Appellate Tribunal will now frame the questions that the High Court will actually decide. The first hearing date will be the signal for how long this final leg of the battle will take.
Source: thehindu.com
This brief was synthesised by AI from the source linked above.
