This judgment has further given a new twist to the interpretation of the international tax regime. The ruling on one hand has expanded the rule of law on subject matters affecting the national interest beyond the territorial boundaries; on the other it has redefined the lens of tax planning. The Bombay High Court, in paragraph 168 of its decision, observed: that since “The very purpose of 本文来自辣.文,论-文·网原文请找腾讯3249，114 the Indian company, by other foreign company. This being the dominant purpose of the transaction, the transaction would certainly be subject to municipal laws of India, including the
Indian Income-Tax Act.” It resolved the long standing controversy of preference of
form or Substance doctrine. Considering the economic angle, the Honorable court classified the case into a transaction that had considerable effect on the Indian taxing regime and therefore laid down a concise interpretation reinforcing the canon of prevention of tax evasion at all levels.
Strategies that can possibly combat such shifting of income. The Doha text had failed to come out strongly against tax evasion a significant part of which comprised of the
multinational companies' shifting of profits out of developing countries before they can
be taxed. However in the meeting of the heads of the G20 group, they have finally realized the need address the core issues relating to tax evasion.
Some other steps that can be implemented are
Form a team at regional and international level to conduct a free and fair investigation into the tax planning of TNCs. For this a huge cooperation of nations is required.
Under an OECD-negotiated treaty, 19 countries, including states as diverse as the US, Italy, and Azerbaijan now can prosecute tax evaders within their jurisdictions on behalf of other signatory countries. The European Union passed a similar law in 2000, while Brazil, India, and South Africa began cooperating with each other to identify suspect transactions in 2006. Their targets typically conceal assets in the roughly 40 nations generally seen as tax havens, which are analyzed routinely by international organizations such as the OECD and the International Monetary
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