Flipkart: According to reports, the Delhi High Court has provided significant relief to Flipkart by putting a halt to the Income Tax Department’s reassessment proceedings against the company’s e-commerce marketplace division.
Flipkart gets relief
The Delhi High Court was recently approached by the company to challenge the reassessment order issued by the department for fiscal year 2020. Flipkart Marketplace, based in Singapore, invested over Rs 3,000 crore in India-based Flipkart Internet Pvt. This investment was deemed as tax avoidance by the Income Tax Department, leading to a reassessment process against the company.
The representative advocating for Flipkart Marketplace argued that purchasing shares in Flipkart Internet should not be considered an attempt to avoid paying taxes. Unless the assessing officer has credible evidence to suggest that it involves circular transactions, the investment should not be deemed as an attempt to evade taxes.
The High Court bench acknowledged that other courts are also discussing similar legal questions in various cases. As a result, it has sent a notice to the Income Tax Department, requesting that it file its counter-affidavit within the next eight weeks.
The next hearing regarding this matter is set for December 6th.
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