TaxTMI 
TaxTMI 
2021 (8) TMI 1124
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....ent year 2007-08. 4.The challenge to the assessment order was on the following grounds:- 4.1.The assessee had filed their return of income on 29.09.2008 admitting loss and the return was processed under Section 143(1) on 24.08.2009. Thereafter, the case was taken up for scrutiny on 29.09.2009 by the second respondent herein and the assessee responded to the notice issued by the authorities and filed documents and records responding to all the queries raised. However, no order of assessment was passed by the third respondent and while so, the first respondent issued notice under Section 143(2) on 16.10.2010 stating that the files have been transferred to him. 4.2.The assessee appeared before the first respondent and invited the attention of the first respondent to the documents and records, which were placed by the assessee. The assessee would contend that the first respondent without considering any of the documents and materials, mechanically completed the assessment by order dated 30.12.2010, impugned in the writ petition. 4.3.It is submitted that the first respondent had invoked Section 68 of the Act and erroneously concluded that the entire share capital of more than Rs. 31....
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.... Indian promoter and the oversees investor was also on record. Apart from that, there was a Memorandum of Understanding (MoU) and Joint Venture (JV) Agreement between the foreign investor and the Tamil Nadu Industrial Development Corporation (TIDCO). The Assessing Officer failed to advert to any of the documents while completing the assessment. Further, the assessee had furnished the audited financial statements of the foreign investor, its Memorandum of Articles and certificate of incorporation etc., and these documents were never adverted to by the Assessing Officer. 4.5.Further, it is submitted that Section 68 only requires the assessee to prove the sources of investment and nothing more. Therefore, it is contended that the assessment is bad in law, is in violation of the principles of natural justice and is in gross violation of the provisions of the Act and therefore, liable to be set aside. 5.The Revenue resisted the prayer sought for by the assessee by raising a preliminary objection with regard to the maintainability of the writ petition on the ground that as against the order of assessment, the assessee has a remedy of filing of an appeal before the appellate authority a....
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....t offered the same to tax and it cannot plead hardship without producing evidence regarding the availability of funds. On the above pleadings, the writ petition was heard by the learned Single Bench and by the impugned order, the writ petition has been dismissed primarily on the ground that the assessee was not justified in not availing the appellate remedy provided under section 246A of the Act. Assailing the correctness of the said order, the appellant is before us by way of this appeal. 9.It is submitted by the learned Senior Counsel for the appellant that the learned Single Bench erred in dismissing the writ petition without taking note of the fact that no sufficient opportunity was granted to the assessee during the assessment proceedings and since the assessment was getting time barred, it was hastily and hurriedly completed on 31.12.2010 without even conducting any enquiry on account of lack of time. Further, it is submitted that the Assessing Officer failed to issue show cause notice before making an assessment by invoking Section 68 of the Act and this being a statutory requirement, non-compliance of the same will vitiate the entire addition. Further, on facts, it is subm....
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....2019] where the facts were identical. Further, the learned Writ Court had relied on a decision in W.P.No.3144 of 2016 dated 15.04.2021, which is not applicable to the facts of the assessee's case. 11.The learned Senior Counsel for the appellant had painstakingly taken us through the findings recorded by the Assessing Officer and the various documents, which were referred to by him in the course of argument to establish that the assessee had proved the creditworthiness of the investors, it has established the identity of the investors, the genuineness of the transaction and apart from producing approval of FIPB and RBI and the funds were routed through normal banking channel and the banks, viz., the authorized agents have given foreign inward remittance and ignoring all thee documents, the assessment was completed and therefore, the learned Writ Court ought to have interfered with the assessment order impugned in the writ petition. 12.Mrs.Hema Muralikrishnan, learned Standing Counsel appearing for the respondents sought to sustain the order passed in the writ petition reiterating that the appeal remedy provided to the assessee under Section 246A of the Act is an effective reme....
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....ued before the addition was made by resorting to Section 68 of the Act. The statutory provision does not specifically state that a show cause notice is required to be issued. What is required is that where any sum is found credited in the books of the assessee and it is pointed out by the Assessing Officer, the assessee is required to offer an explanation about the nature and source thereof and if the assessee offers no explanation or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income tax. Admittedly, in the instant case, the assessee has been put on notice and the assessee had participated in the assessment proceedings and submitted their explanation. The Assessing Officer has discussed about the two companies, viz., the Mauritius company and the Dubai company and pointed out that from the balance sheet of the assessee-company, a sum of Rs. 127,52,05,650/- was received as share capital from the Mauritius company and Vishwatej Project Pvt. Ltd., which was incorporated on 10.01.2007. The assessee was called upon to furnish the source for the above amount, which was received as share capital. The ....
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....ed only 40% and therefore, they became minority and did not have any say in the company's business. 19.Further, the Assessing Officer pointed out that though the name of Rakeen (P.) Ltd., Mauritius appeared at 35 of notes, on a perusal of the consolidated balance sheet of the Dubai company as on 31.12.2008, it is seen that nothing is mentioned about the investment in the Mauritius company by the Dubai company and as per the details filed before the Income Tax Department, it shows that US$ 12,35,00,000 was received from Rakeen Developers PJSC (FZC) by Rakeen (P.) Ltd. Thus, the Assessing Officer concluded that the value of US$ 12,35,00,000 is more than dhirams for which Rakeen Developers PJSC (FZC) do not have the source to fund it. Thus, the Assessing Officer concluded that the transfer of amount from Rakeen Developers PJSC (FZC) to Rakeen (P.) Ltd., has not been proved. 20.Further, the consolidated balance sheet of the Dubai company ended 31.12.2008 was again examined wherein, it was found that an amount of AED 457,413,538 was shown to have invested in the shares of the associated/equity accounted investees and when compared to the previous year, it was found that Rakeen Dev....
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....ity and there is no justifiable or valid reason for the assessee to bypass the appellate remedy available under the Act. 24.We are conscious of the fact that the writ petition was of the year 2011 and was pending before this Court all these years. Under normal circumstances, the Writ Court will not relegate the parties to avail the alternate remedy, as it will be too harsh on the writ petitioner to avail the alternate remedy after nearly 10 years. However, in the instant case, we have no other option because, the entire controversy is factual. The onus is on the assessee to establish the genuinity of the transaction and the source of the investment. To dislodge the findings recorded by the Assessing Officer, a deeper examination into the facts has to be done and such exercise cannot be undertaken in a writ petition. That apart, there is an allegation that the assessee has floated 20 shell companies for the purpose of raising funds for acquisition of the lands. The Assessing Officer has gone on record to state that the Dubai company, which was stated to be a Government company, is no longer a Government company on account of the change in the shareholder pattern. To dislodge these ....