The Supreme Court of India has overturned the decision of the Bombay High Court in the Vodafone case, and has found that Indian capital gains tax did not arise on an indirect transfer of shares in an Indian company. The Supreme Court has confirmed that legitimate tax planning remains permissible, and that, in assessing tax structures, courts should adopt a ‘look at’, rather than a ‘look through’, approach. The judgment restores an element of certainty in a highly contentious area of taxation, and provides an encouraging indication that India will continue to present an attractive opportunity for foreign investment.
