Report on the Vodafone case -comments

http://www.dnaindia.com/money/report_dutch-govt-invokes-treaty-in-vodafone-tax-case_1475707

Comments on the Quoted Paras :


1. “However, tax department sources say Vodafone cannot take the shelter of MAP, as the case pertains to an issue falling under the Indian Income tax act and does not involve any element of double taxation.”

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•     It is obvious that, the TD has, unwittingly or otherwise, conveniently forgotten what the SC, in re. Azadi Bachao Andolan, has discussed at length, for handing down its view in favour of the TD itself. For the related discussion on the treaty meaning of – “what is ‘liable’ for taxation”, one may usefully read the article – ‘Tax Treaties – Nuances of Case Law’ (2007) 296 ITR 17 (@ pages 21,22,23)

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2. “Noted tax expert T P Ostwal expressed surprise at Vodafone’s application.”

“Generally only the taxpayer who is subjected to tax or against whom proceedings have been initiated to tax his income can initiate MAP proceedings. In this case, Hutchison has received the income and they could have initiated MAP, but there is no tax treaty between India and Hong Kong. It is difficult to see how the Indian authorities will accept Vodafone’s MAP application,” said Ostwal.”

• ·        With due reverence to the 'surprise' of the tax expert,  for suggestive clues, one may refer the article on the Vodafone Case – (2009) 176 TAXMAN 82 (@93)’.

• In the last reported judgment of the HC itself (wherein the point of dispute wrt the 'jurisdiction' has been dealt with), one may find a discussion as to the treaty implications, proceeding on the strength of the new-found 'facts', and on the admitted  premise that they would be of relevance to the case on hand.