The Bombay High Court has ruled that Vodafone is not liable to pay an income tax demand of 3,200 crore rupees in a case relating to transfer pricing. The verdict has come as a big relief for the UK-based mobile service provider already locked in a big tax dispute with the government. The Income Tax Department had asked the company to pay additional income tax alleging that it has undervalued its shares in the subsidiary Vodafone India Services while transferring them to the parent company in Britain. The transaction took place in financial year 2010. The order in favour of Vodafone is being considered significant because some domestic companies too are involved in similar transfer pricing cases. The tax authority had issued a show cause notice to Vodafone India on January 17, 2014 and later passed an order asking it to pay additional 3,200-crore rupees tax for allegedly undervaluing the shares of its Pune BPO.On January 27, Vodafone moved the High Court challenging the I-T order and contended that its transaction on transfer of shares was not taxable under the Indian tax laws.