Professional Documents
Culture Documents
Submitted by:
Gurmukh singh Lamba
2013049
nd
2 SEMESTER
CERTIFICATE
LEGAL METHODS
MRS. K. SUDHA MAM
Particulars
Remarks
Abstract
First consultation
Second consultation
Third consultation & final
Submission
ACKNOWLEDGEMENT:
would
like
to
express
my
gratitude
towards
our
Vice-Chancellor
Case name:
Vodafone International Holdings B.V., a company incorporated under the provisions of the
Companies Act
Vs.
Union of India (UOI), Ministry of Finance and Asstt. Director of
Income Tax (International Taxation)
writ jurisdiction. It was held that where a right or liability is created by a statute which gives a
special remedy for enforcing it, the remedy provided by that statute only must be availed of. In
the present case, the Act provides for a complete machinery to challenge an Order of assessment,
and the impugned Orders of assessment can only be challenged by the mode prescribed by the
Act and not by a petition under Article 226 of the Constitution.
On grounds of Constitutional validity of provisions and non-production of vital documents the
respondent contended that the petitioner has not produced vital documents that are crucial to the
determination of the issue of chargeability to tax in India and therefore, the petitioner cannot
challenge validity of provisions in issue. It was held that even if the burden of proof does not lie
on a party, the Court may draw an adverse inference if he withholds important documents in his
possession which can throw light on the facts at issue. Therefore, when the Petitioner has
challenged the constitutional validity of the Amendment to Sections 191 and 201 of the I.T. Act
by the Finance Act, 2008, then the same must be in context of certain facts pleaded and proved
by evidence in the form of documents on record and not in vacuum or in the abstract.
Ratio Decidendi:
Transaction amounting to transfer of capital assets in India, by divestment of controlling stake in
an Indian Company held by a foreign company to another foreign company resulting in
extinguishment
of
right,
would
attract
provisions
of
Indian
Any profit or gain which arose from the transfer of a group company in India has to be regarded
as a profit and gains of the entity or the company which actually controls its, particularly when
on facts, the flow of income or gain can be established to such controlling company and as such
is taxable in India.
When the dominant purpose of entering into agreements between the two foreigners is to acquire
the controlling interest which one foreign company held in the Indian company, by other foreign
company, the transaction would certainly be subject to municipal laws of India, including the
Indian Income Tax Act as per Effects Doctrine.
Where a right or liability is created by a statute which gives a special remedy for enforcing it, the
remedy provided by that statute only must be availed of.Even if the burden of proof does not lie
6
on a party, the Court may draw an adverse inference if he withholds important documents in his
possession which can throw light on the facts at issue.
The potential investors would need to be therefore extra careful while structuring their crossborder mergers and acquisitions transactions lest they are slapped with unwarranted and
unexpected tax liability from strange quarters which they have not factored in their negotiations
and to minimize the chances of litigation.