The recent judgment by the Hon’ble Telangana High Court sheds light on the application of General Anti-Avoidance Rules (GAAR). Here are a few key points from the ruling:
1. **GAAR Codification:**
The court reaffirmed that the 2018 GAAR provisions are a codification of **pre-existing judicial anti-avoidance rules**. In other words, these rules have evolved over time through court decisions.
❓ Weren’t the same principles followed by the Hon’ble Delhi HC ruling in its ruling on anti-profiteering??
2. **Substance Over Form:**
GAAR emphasizes substance over form. This means that the true intent and nature of a transaction should be considered, rather than just its legal structure.
❓Hasn’t the Hon’ble SC followed this principle in its secondment ruling??
In summary, the Hon’ble High Court reinforces the importance of scrutinizing transactions based on their substance and intent, rather than relying solely on legal formalities. Hence, absence of a specific stipulation under the law may not be an embargo so far as application of the anti avoidance measures are concerned.
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