ET reported that Bombay High Court on Friday dismissed the plea of the Aditya Birla Group flagship Hindalco Industries which had challenged the income-tax department's contention that tax should be levied on corporate guaranatees issued by the company.

A division bench comprising justices DY Chandrachud and AA Sayed, while dismissing the petition filed by Hindalco, said there is no breach of any natural justice and the petitioner can exercise alternate remedies to go for an appeal, including the dispute resolution panel.

The Hindalco plea challenged a draft transfer pricing order of the income tax department, saying that Hindalco needs to pay approximately INR 1,100 crore. According to the tax department, eight hearings were given by the transfer pricing officer to Hindalco before concluding on the levy.

The draft order represents a potential tax liability and the I-T department has time till December 31 for issuing a final order against the company.

Hindalco has filed the petition on December 15, seeking immediate relief and quashing of the tax department order. The aluminum and copper giant was served with the draft transfer pricing order for 2008-09. The case relates to corporate guarantees issued by Hindalco to an SPV formed for the acquisition of the Canadian giant Novelis for USD 6 billion in 2007.

(Sourced from ET)