The Supreme Court on Friday agreed to hear an income tax department’s appeal against Vodafone India Ltd in a transfer pricing case.

A bench comprising justices Anil R. Dave, Adarsh Kumar Goel and newly-appointed D.Y. Chandrachud granted leave so that the case can be heard in full.

In April, the tax department said it would appeal the Bombay high court ruling on transfer pricing.

The high court had ruled that the income tax department did not have the jurisdiction regarding the sale of Vodafone’s call centre business to Hutchison Whampoa Properties and assignment of call options to Vodafone International Holdings BV in 2007-08.

The department, in a Twitter post, said, “In the case of one of the cases of Vodafone, it has been decided to file SLP before Hon’ble Supreme Court against the order of Mumbai HC. A substantial question of law has arisen on the issue of taxability of capital gains arising on the surrender of call option rights. Hon’ble High Court has held that surrender of option rights is not a transfer under the provisions of I-T Act. This ruling will have adverse effect in many other domestic cases also. As such it has been decided to challenge the said ruling.”