WHILE arguing before the Division Bench of Bombay High Court in the
billion-dollar Vodafone case, the Counsel for the Revenue, Mr Mohan Parasaran,
the ASG, emphasised on the territorial nexus of the entire transactions with
India. To substantiate his point being made, he referred to the FIPB approval
obtained by the assessee. Since FIPB nod was critical for successful wrapping up
of the deal, it cannot be said that it was a deal between two parties struck
outside India and the Income Tax Department has no jurisdiction to tax the
capital gains, he added.
Further elaborating his point, Mr Parasaran submitted that it was not a
simple deal between Vodafone and an entity located in Cayman Islands. Had it
been the case Vodafone would not have acquired controlling stake in the
Indian company by merely transferring the shares, he argued.
Revenue is expected to carry its argument further in the next
hearing.
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