HC sends share valuation controversy to DRP - But who has the edge?

After a hard fought court battle between top legal counsels, the Bombay High Court pronounced its verdict in the Vodafone share valuation case, with both sides claiming victory. The division bench of Chief Justice Mohit Shah & Justice M.S. Sanklecha held that in view of Sec 92(1), there must be "income arising and/or affected or potentially arising and/or affected by an international transaction" for application of Chapter X, i.e. Transfer Pricing law. But at the same time, the High Court has rejected Vodafone's contentions that a DRP hearing cannot be "fair" and that the 3 member panel did not have powers to decide whether a transaction is an international transaction.


So, with the case headed back to DRP for deciding the question of jurisdiction, who has the edge in this see-saw fight? Will the Bombay HC diktat on income arising/potentially arising as a pre-requisite for invoking TP provisions, help Vodafone? Does the Revenue have convincing grounds to assert jurisdiction? Are we headed back to the Courts once again for Round - 2 or is there a way in which the DRP can settle this issue to the satisfaction of both taxpayer and Revenue?