The petitioner, M/s. Vishwataj Developers Pvt Ltd was involved in the business to acquire, purchase, obtain or hire by exchange of any buildings, land, or other structures, for development and carrying on developmental activities on such buildings, lands, or other structures and to sell, transfer, rent or otherwise set of such land, buildings, structures, before or after development.
Advocate on behalf of the petitioner contended that the share capital made is in accord with the law and the Ministry of Finance in a letter dated 19.05.2008 approved the capital share of the petitioner's Company. Based on the said order passed by the Government of India, petitioners stated that there was no illegal flow of money nor the investment was made in an inept manner. When the share capital was made the approval of the Competent Authorities of the Government of India, there is no proper reason at all to pass the impugned order of assessment opposing to the legality of investments made by petitioners Company.
The respondent authority stated that the Mauritius Company had simply been used by the UAE Company to hoodwink the taxing authorities in India, whereas actually, it is the UAE Company that has invested in the Assessees Company. Hence, mere contention raised by petitioners regarding the alleged admission by the respondents is improper and it is mere extraction of the averments of petitioners in their affidavit.
The single-judge bench of Justice S.M. Subramaniam opined that at the time when the facts are disputed by the parties to the writs on hand, the appeal alone would be a proper remedy and in such cases, the Assessees stated that there are certain admissions and disagreements. Nevertheless, such admissions were deprived of by the respondents. Thus, an elaborate adjudication concerning the original records is undoubtedly imminent. In the event of preferring an appeal, the Assessees are also benefited and more so adjudication of issues concerning documents shall be done. Thus, petitioners are bound to approach the Appellate Authority as anticipated under the provisions of the Act, the court said.
The court held that the petitioners have not exhausted the appellate remedy as per under Section 246A of the Income Tax Act. Thus, petitioners are at liberty to choose an appeal by following the procedures anticipated. In the event of filing an appeal, the Appellate Authority is bound to consider the same and pass orders on merits and per law and by allowing the parties concerned.