Bombay HC's share valuation ruling - Have we heard the last word yet?

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Bombay HC settled arguably the biggest tax controversy in recent times, when on October 10, it ruled in favour of Vodafone on the issue of share valuation. The division bench of Chief Justice Mohit Shah & Justice M.S. Sanklecha, while allowing Vodafone's writ, re-affirmed their earlier conclusion that existence of income is an essential pre-requisite to apply transfer pricing provisions and went on to hold that issuance of shares does not in any way give rise to 'income'. In significant observations with potential ramifications for the evolving TP law in India, the Bombay HC also ruled that Chapter X could be invoked only when income is chargeable under normal provisions of the Income-tax Act.

Will this judgment be the final word on the share valuation litigation? Should the IT Department accept the HC verdict and not entertain the thought of filing an SLP? Will this HC ruling also benefit other disputed TP transactions? And finally, will this also have an impact on the APAs being sought for on share issue transactions? 

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