20.3.2012 (UNI) In a major setback for the UPA government, the Supreme Court today dismissed the review petition filed by the Centre in the Vodafone case.

A three-judge bench headed by Chief Justice S H Kapadia had allowed the petition of Vodafone challenging the demand of Rs 11000 crore by the Income Tax department in Vodafone-Hutchsion deal.

The Union government had challenged the judgement on the grounds that it was a policy matter and the Supreme Court should not have interfered in the matter.

The apex court bench which also comprised Justices A K Patnaik and Swantenter Kumar in their order today noted that there was no merit in the review petition.

The government has also decided to amend the Income Tax Act with effect from 1962 to cover transactions which have taken place in a foreign country but with capital gains occurring in India. The IT department would be entitled to demand income tax in such cases. UNI