Shares of Vodafone (NASDAQ:VOD) Idea experienced a boost on Thursday, following a favorable verdict from the Bombay High Court which commanded the income tax department to refund ₹1,128 crore to the telecom company. This event sparked increased activity among BSE investors, and by 12:19 p.m. IST, Vodafone's shares had risen by 2.05% to ₹13.92.
Despite a five-day loss of 1.62%, Vodafone Idea has shown resilience with a notable monthly growth of 27.80%. The telecom company has also seen an impressive six-month rally of 103.95%, and a year-to-date climb of 74.13%. Meanwhile, the Nifty 50 benchmark managed only a minor increase of 1.04% over five trading sessions and recorded a slight dip of 0.34% over the previous month.
The Bombay High Court delivered its judgment on Wednesday concerning an assessment order for the fiscal year 2016-2017 issued by the IT department against Vodafone Idea. The court declared the order "time barred" and unsustainable, leading to the refund decree in favor of Vodafone Idea.
The case pertains to Vodafone Idea's appeal for a tax refund for the fiscal year 2016-17. The Dispute Resolution Panel (DRP) issued an order regarding this claim on March 25, 2021, which was instantly uploaded on the Income Tax Business Application (ITBA) portal. However, due to negligence, the assessing officer only finalized this order in August 2023.
The court also called for an investigation and stern action against the negligent assessment officer, attributing a significant exchequer loss to their delay. This process is set to conclude within a month. In June 2023, frustrated by the non-refund of excess tax, Vodafone Idea lodged a complaint with the High Court against both the central processing center in Bengaluru and the assistant commissioner of income tax.
In related news, during a quarterly earnings call, Vodafone Idea confirmed a promised promoter funding commitment of ₹2,000 crore (INR100 crore = approx. USD12 million) expected to close in the December quarter. Furthermore, at the India Mobile Congress, Chairman Kumar Mangalam Birla unveiled plans for significant investments for 5G rollout. The company's shares hit the day's high, trading at ₹13.95, with debt funding discussions with banks to follow external equity investments.
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