Vodafone/ shell verdict - why it will be prudent to wait for sc judgment. thefirm.moneycontrol/story_page.php?autono=1049508 1. Section 92 says any income arising out of or from international transaction shall be computed at arms length price. So, what it says income arising out of international transactions. Now, international transaction is defined – where it is defined - Section 92B. Let’s come to Section 92B(c). It says capital financing, including any type of long-term or short-term borrowing, lending, guarantee, purchase or sale of marketing securities or any type of advance, payments, deferred payments, receivables or other debts arising. 2. The moment an AE buys a share of Indian company for a lesser value according to us it triggers the international taxation. The moment it triggers the Chapter X, Transfer Pricing comes in picture. 3. If Rs 100 share is being sold, is being subscribed for Rs 20 then definitely the value is being transferred. Benefit is being transferred to AE and there is a base erosion in this country.
Posted on: Fri, 10 Oct 2014 14:09:49 +0000
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