IN THE INCOME TAX APPELLATE TRIBUNAL “J” BENCH, MUMBAI BEFORE SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER ITA No.671/AHD/2015 (Assessment Year: 2010-11)

Vodafone West Limited.

(formerly known as Vodafone Essar Gujarat Limited)

Vodafone House, B Wing, 4^th Floor, Corporate Road, ............... Appellant Prahladnagar, Ahmedabad- 380051 PAN : AAACF1190P v/s Deputy Commissioner of Income Tax Circle - 4(1)(2)

Ahmedabad ……………… Respondent ITA No.1634/AHD/2015 (Assessment Year: 2010-11)

Deputy Commissioner of Income Tax Circle 4(1)(2) ............... Appellant Ahmedabad v/s Vodafone West Limited (Formerly Known As Vodafone Essar Gujarat Limited)

Vodafone House, B Wing, 4^th Floor, Corporate Road, Prahladnagar, Ahmedabad- 380051 ……………… Respondent PAN : AAACF1190P P Assessee by : Shri K.K. Ved, Shri N.A. Patade Revenue by : Shri Pankaj Kumar, CIT-DR Date of Hearing – 06/11/2025 Date of Order - 11/12/2025

O R D E R

PER SANDEEP SINGH KARHAIL, J.M.

The present cross appeal arises from the final assessment order dated

23.02.2015, passed under section 143(3) read with section 144C of the Income Tax Act, 1961 ("the Act") pursuant to the directions dated 10.12.2014 passed by the learned Dispute Resolution Panel, Ahmedabad [“learned DRP’’], for the assessment year 2010-11.

2. The brief facts of the case are that the assessee is a cellular mobile telephony service provider in the State of Gujarat. For the year under consideration, the assessee filed its return of income on 29.09.2010, declaring a total income of Rs.4,00,97,74,506/-. Subsequently, the assessee filed its revised return of income on 29.03.2012, declaring a total income of Rs.4,10,84,31,389/-. The return filed by the assessee was selected for scrutiny, and statutory notices under section 143(2) and section 142 (1) were issued and served upon the assessee. Vide draft assessment order dated 31.03.2014 passed under section 144C read with section 143(3) of the Act, the Assessing Officer (‘‘AO’’) proposed certain additions and disallowances to the total income declared by the assessee. Being aggrieved, the assessee filed detailed objections before the learned DRP, which were disposed off vide direction dated 10.12.2014 issued under section 144C(5) of the Act, agreeing partially with the assessee, allowing certain objections against the additions/disallowances proposed by the AO. In conformity, the AO passed the impugned final assessment order, assessing the total income of the assessee at Rs.6,54,61,22,360/-. Being aggrieved, both the assessee and the Revenue are in appeal before us.

ITA No. 671/Ahd./2015 Assessee’s Appeal (A.Y. 2010-11)

3. In this appeal, the assessee has raised the following grounds: -

“Ground no 1-Disallowance of depreciation amounting to Rs

31,60,00,000

1. On the facts and in the circumstances of the case and in law, the learned AO, based on the directions of the learned DRP, has erred in treating the transfer of Passive Infrastructure ('PI') by the Appellant to Vodafone Infrastructure Limited (VinfL'), duly approved by the Hon'ble High Court, as a transaction purposely planned to avoid tax and thus, disallowing depreciation of Rs 31.60 crores on Pl assets.

1.1 On the facts and in the circumstances of the case and in law, the learned AO, based on the directions of the learned DRP has grossly erred in holding that transfer of Pl assets by the Appellant to VinfL and thereafter, by VinfL to Indus was a means to evade taxes, which would have otherwise been payable by the Appellant had the transaction been undertaken as a simple transaction between the Appellant and Indus Towers Limited ('Indus').

1.2 On the facts and in the circumstances of the case and in law, the learned AO, based on the directions of the learned DRP has erred in holding that transfer of Pl assets by the Appellant to VinfL without consideration does not qualify as a 'gift' and hence, not exempt under section 47(iii) of the Act.

1.3. On facts and circumstances and in law, the le