Copies of the Finance Bill, 2012 and the Explanatory Memorandum are now available. During the course of the day, we will highlight the important changes made and examine their implications. The purpose of this post, however, is to highlight that the Bill proposes a retrospective amendment to sections 2(14), 2(47) and 9 of the Income Tax Act, 1961, and this amendment purports to be clarificatory...
The Bombay High Court on applying Vodafone to Sham Transactions
In Killick Nixon v DCIT, decided on 6 March 2012, a Division Bench of the Bombay High Court (Dr DY Chandrachud and MS Sanklecha JJ.) has considered the application of the guidance given by the Supreme Court in Vodafone to a transaction that was found at first instance to constitute a sham. The attempt by the taxpayer in this case is reminiscent of the tax avoidance transactions that shaped...
Fourth Week of Arguments: Constitution Bench on Bhatia International
Arguments continued this week before the Constitution Bench comprising the Chief Justice, and Justices Jain, Nijjar, Khehar and Desai. Mr Salve began his arguments this week by pointing out that the choice of the seat of arbitration is of great importance in international arbitration because parties often wish to resolve their disputes in a neutral forum. It is partly for this reason that London...
Part II – An Analysis of the Supreme Court’s judgment in Vodafone
In our first post on the Vodafone judgment, we set out the issues of law arising from the Court’s findings, and discussed two of those – the approach to tax avoidance and the meaning of controlling interest. This post considers two other important issues – India’s approach to the corporate veil, and the scope the “extinguishment” provision under section 2(47) of the Income Tax Act, 1961...
Third Week of Arguments: Constitution Bench on Bhatia International
Arguments continued this week before the Constitution Bench comprising the Chief Justice, and Justices Jain, Nijjar, Khehar and Desai. Unlike counsel before him, Dr Singhvi concentrated principally on the applicability of section 9 of the 1996 Act to arbitrations in which the seat is abroad, and it was his case that section 9 ought to apply no matter what view the court takes of the applicability...
An Analysis of the Supreme Court’s judgment in Vodafone – Part I
In our post on the judgment of the Bombay High Court, we expressed the hope that the Supreme Court would take a different view. That the Court has now done so has been welcomed as much needed respite in bad times. Even more importantly, it is heartening that the Court has taken what it is submitted is the correct view especially on the facts of Vodafone’s case. But from...
Vodafone: Key Points
The Supreme Court’s judgment today in Vodafone is of enormous importance to a number of branches of Indian law. The majority judgment has been delivered by the Chief Justice and Swatanter Kumar J. A concurring judgment delivered by K.S. Radhakrishnan J. in some respects goes even further. A copy of the judgment is available on the Supreme Court’s website. A detailed analysis of the judgment will...
Vodafone’s appeal allowed
It has been reported that Vodafone’s appeal has been allowed, the Supreme Court inter alia rejecting the Revenue’s “extinguishment” argument and holding that section 9 is not a “look-through” provision.
We will have an opportunity to discuss this judgment in detail over the coming days once a copy is available.
Second Week of Arguments: Constitution Bench on Bhatia International
Arguments continued this week before the Constitution Bench comprising the Chief Justice, and Justices Jain, Nijjar, Khehar and Desai. As we noted, counsel for the appellants in the first week concentrated principally on whether the courts of the seat of arbitration have exclusive jurisdiction to test the validity of an arbitral award even when the proper law of the contract is the law of another...
Constitution Bench on Bhatia International: First Week of Arguments
A Constitution Bench comprising the Chief Justice and Justices Jain, Nijjar, Khehar and Desai heard arguments this week in Bharat Aluminium v Kaiser Aluminium Technical Services, in which the principal issue is whether Part I of the Arbitration and Conciliation Act, 1996 applies to arbitrations where the seat of arbitration is outside India. As is well known, and as we have discussed on several...
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