When a part of an agreement is considered an unauthorized circumvention scheme, the tax consequences are determined only by reference to that party. The consequence is that a tax law to collect taxes must be interpreted in the strictly legal sense of the term. No tax can be collected and levied, except with the authorization of the law. In a tax law, just look at what is clearly said. Although some high courts and appelal bodies have characterized tax evasion and aggressive tax planning as illegal by going beyond the language of status, the Hon`ble Supreme Court has very clearly taken a literal approach to interpreting tax provisions. i. The overall effect of the arrangement is significantly different from the shape of each step or part of the provision. This establishes above all the authority of the department of income tax and gives the doctrine of substance the form of legal holiness, to go beyond what is agreed, to resemble what it looks like and to aerate the corporate veil. An agreement may be considered inadmissible if the main purpose of the agreement is to obtain tax benefits (hereafter the main purpose review) and one of the conditions under paragraph 96, paragraph 1, is met under clause „a,“ „b,“ „c“ or „d“ (known as „Tainted Element Test“). (a) a reduction or bypass or deferral of taxes or other imputations of this Act; or in Vodafone International Holding BV vs. UOI (2012) 17 taxmann.com 202 (SC), the Hon`ble Supreme Court refused to go beyond what was clearly stated in Section 9(1) of the Income Tax Act, 1961. Judge S.H. Kapadia in paragraph 71 of his decision – A legal fiction cannot be extended by a specific interpretation, particularly if the result of such an interpretation is to change the concept of reloading, which is also contained in Article 9, paragraph 1, (i), particularly if one reads section 9, paragraph 1, point (i), section 5 (2) b) of the law.
In the name of turnover, it is alleged that under Section 9(1) (i) it can „understand“ the transfer of shares of a foreign company holding shares in an Indian company and treat the transfer of shares of the foreign company in an equivalent manner to the transfer of the shares of the Indian company, assuming that Section 9, paragraph 1, point (i), includes direct and indirect transfers of capital assets. For the reasons outlined above, Section 9, paragraph 1, point (i) cannot be extended to indirect transfers of assets/real estate in India through an interpretation process. To do this, a change in the content and aum of Section 9 (1) (i) would be underway. Section 9 (1) (i) we cannot rewrite. Parliament did not use the terms indirect transfer in section 9, paragraph 1, point (i). Many of us have a misunderstanding about GAAR about tax evasion and tax planning. However, GAAR will enter the picture in the case of the „unacceptable circumvention regime“ that even if the tax benefit of such an agreement exceeds case 3 crore. 1.
The licensing body is authorized to apply the consequences of an unauthorized circumvention scheme to another previous year in which the procedure is under way. The AO may initiate the evaluation procedure for this other year, subject to the limitation of Section 153, and for this other year, there is no need to re-comply with Section 144BA. 3. Tax evasion – tax evasion is an illegal arrangement on financial matters to evade tax debt. This is a flagrant violation of the provisions of a tax law.