Vodafone International Holdings BV v Union of India and OthersThe Vodafone case is extremely broad and the facts are very comprehensive. This is one of the landmark cases before the Supreme Court of India which deals with Indian taxation and deals with the scenario where capital gains arise from transfer of shares from a foreign holding company to a other international company. The capital gains in these cases would be those arising from the benefits the company obtains through its India-based subsidy. The main question is whether these transactions should be taxed in the Indian tax system. To understand the facts without getting lost in the immensity of the events, here is the series of facts which present a more concise but in-depth chain of events. • The Hutchison group of companies had taken certain interests in the Indian telecom sector by investing in Hutchison Essar. Ltd (HEL) in 1992. Hutchison had a subsidiary listed in Hong Kong which was incorporated in the Cayman Islands in 2004. This subsidiary was HTIL. • Vodafone acquired approximately 67% stake in HEL from HTIL. Vodafone and HTIL entered into a share purchase agreement in February 2007, under which HTIL agreed to transfer the share capital of CGP without any encumbrance and with all rights attached thereto or arising therefrom.• Essar Teleholding Limited (ETL), HTIL, Essar Communications (India) Limited (ECIL), Essar Communication Limited (ECL), Essar Tele Investments Limited (ETIL), signed a settlement agreement in May 2007 regarding Essar Group's support for the completion of the proposed transaction and agreement not to pursue legal action against Hutchison. Group company, etc., in substitution for HTIL's payment of US$373.5 million after completion and another US document...... middle of paper ...... rectification of flaw. Capital gains arising from any transaction likely to generate profits from any employment or investment in India should be taxable in India as provided in the subsequent amendment. In fact, it forced a quick amendment because although taxing such transactions was the government's intention, the framers, when drafting the law, could not contemplate such international transactions and were therefore unable to legislate accordingly. of the most published and examined judgments in recent times. This is one of the most requested judgments in tax matters. Although the judgment provided a clear and precise understanding of the law, it did not assist the government in its intentions and did not assist the Ministry of Finance in implementing its intention to make transactions like that of Vodafone..