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ThynkTax /Tax Reference /Case Laws /Vodafone International

Vodafone International

Supreme Court of India·2012·ITR
Facts

Vodafone acquired Hutchison's Indian telecom business through a Cayman Islands SPV transfer. Income Tax Department demanded ₹11,000 crore in capital gains tax.

Issue

Whether transfer of shares of a foreign company holding Indian assets constitutes "transfer of capital asset situate in India"?

Held

No. The SC held that a transfer outside India of shares of a foreign company is not taxable in India even if the underlying assets are Indian.

Ratio

Look-at, not look-through approach. (This decision was reversed by the retrospective Finance Act 2012 amendment.)

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