VEDANTA LTD. Vs. ASST. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) This is a writ petition challenging the notice dated 31st March, 2017, issued by the Respondent, Assistant Commissioner of Income Tax, Circle26 (1), New Delhi (hereafter, the Assessing Officer) (AO) seeking to reopen the assessment of the Petitioner for Assessment Year (AY) 2010-2011 under Section 147 of the Income Tax Act, 1961 (the Act).

(2.) The background facts as stated in the petition are that the erstwhile Sterlite Industries (India) Ltd., which stands amalgamated with Sesa Sterlite Ltd., and now known as Vedanta Ltd., was incorporated in 1975. During the relevant AY, the Petitioner was engaged in the business of manufacturing of copper and other non-ferrous metals, phosphoric acids, sulphuric acid etc, in the AY 2010-2011. The return of income was filed on 8th October, 2010 and was, thereafter, revised on 31st March, 2012. The Petitioner was required to file its audited accounts, tax audit report and Form 3CEB, containing details of the international transactions entered into between the Petitioner and its affiliates. These were duly filed with its return.

(3.) According to the Petitioner, in the audited accounts filed before the AO, it made disclosures in respect of consultancy and management fees paid to Vedanta Resources PLC (VR PLC). This was in the sum of Rs.23.71 crores. Likewise, in the Form 3CEB, disclosure was made regarding the aforementioned sum paid to VRPLC. Also, in Schedule M and Schedule V of the tax audit report, details of payments made to VR PLC towards longterm incentive plan, management fees and Corporate Guarantee Commission were duly disclosed. Note 4 below the said Schedules reads as under: