In this article, I will try to analyze the Vodafone case in terms of capital gains. Comparing Sanofi with the Vodafone case, the question arises as to why Sanofi was not subject to tax compared to Vodafone. The answer to this question is quite simple: when accounting for a company liable for tax, both the tax and the intention of the transaction must be considered. The main issue before the Court in the Vodafone case concerned the taxation of capital gains between two foreign companies on a transaction. foreign transaction. In this particular case, the Supreme Court is addressing the absurdity of the government's tax demand. There is no similarity between selling assets and selling shares of a company. So, when a company has an ownership in the shares of a company, it does not mean that the same company would also own the assets of that company. Under Section 9(1)(i) of the Income Tax Act, 1961, it is clearly stated that tax liability will arise only in case of transfer of a capital asset to India. Suppose a Hyundai company operates i...