The Bombay High Court continued hearing the Vodafone counsel's arguments in the Vodafone tax case today. The Vodafone Counsel argued that the Income Tax Act is applicable only to India and the Parliament does not intend outside legislation. Vodafone submitted that since it is a non-resident, it is not liable to deduct tax at source. 

 Section 195 of the Income Tax Act 1961, says, Any person responsible for paying to a non-resident, not being a company, or to a foreign company, any interest or any other sum chargeable under the provisions of this Act (not being income chargeable under the head 'salaries') shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rates in force.

 The Vodafone Counsel stated that "Person" means a resident of India and Vodafone is not liable to deduct tax at source. The revenue laws of one country cannot be imposed on another country, it further added.
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