President Pranab Mukherjee on Wednesday said the court ruling against the Indian government in what has come to be called the Vodafone tax case was testimony to the rule of law that prevails in the country.Making a pitch for Israeli investments in a host of areas, notably infrastructure, the president told his Israeli counterpart Reuven Rivlin during their talks that India was not just an attractive destination for overseas capital but also a safe one."Our president explained that in the Vodafone judgment, the court has given a ruling that goes against even the government," Anil Wadhwa, Secretary (East), in the ministry of external affairs said, while briefing the media on President Mukherjee's engagements here."This demonstrates how the rule of law prevails in the country," he added.
The Bombay High Court had ruled that there was no case for the government to raise a Rs.3,200 crore ($500 million) additional tax demand on Britain-based telecom major Vodafone, setting aside a verdict given by a tribunal earlier.Following that, the government decided not to challenge the verdict in the Supreme Court.The income tax department had asked the company to pay additional income tax, alleging it had undervalued its shares in its subsidiary Vodafone India Services while transferring them to the parent company.
During his interaction with the Israeli president, Mukherjee gave an overview on the Indian economy and how it had emerged as an attractive destination on areas like roads, ports and even defence for which foreign investment limit had been raised to 49 percent.At the same time, he said Israeli technology will be welcomes and sought in areas like drip irrigation and high-yielding seeds since India had the onerous task of feeding its 125-billion population.He said India also had a favourable talent pool and that 10 million youth were joining the job market every year.