ARTICLES

Vodafone-All is Not Lost-A Mixed Verdict

... Bombay High Court on 8th September, 2010 ruled that Income tax authorities in India have the jurisdiction to tax transactions, even though the transaction took place outside India as the underlying assets were in India. The Court held that the transfer of these rights and entitlements constitute capital, which can be taxed as part of non-resident income. This upholds the contention of the tax authorities which argued that Vodafone (non-resident buyer) should have deducted tax before making payment to the nonresident seller. The Court also remarked that only that part of income will be taxed in India which can be attributable to India and not on the foreign source income. 

Reasonable Period of Limitation-Analysis with respect to Directorate General of Foreign Trade (DGFT)

In order to promote exports, the Government has been promoting various schemes like the Advance License Scheme. Even after fulfilment of the export obligation under this scheme, Assessees are receiving Show Cause Notices for non-fulfilment of obligation after Five years or even a decade from the issue of advance licence. The system needs to be revamped and steps have to be taken to plug in the loopholes so that frivolous litigation may be avoided.