PCIT Vs VSL Mining Company Pvt Ltd (Karnataka High Court)
Summary: The Karnataka High Court dismissed the Revenue’s appeal under Section 260A of the Income-tax Act, 1961, arising from the Income Tax Appellate Tribunal, Bengaluru order dated 28 June 2019 concerning Assessment Year 2008-09. The principal dispute concerned whether material found and seized during a search conducted in the case of a third party could be relied upon while completing a regular assessment under Section 143(3), without invoking Section 153C of the Income-tax Act.
M/s VSL Mining Company Pvt Ltd, belonging to the Lad group of companies and engaged in extraction and trading of iron ore, had filed its return for AY 2008-09 declaring total income of ₹55,96,22,255/-. A search under Section 132 had been conducted in the Lad group on 26 October 2007. Following notices under Sections 143(2) and 142(1), the Assessing Officer completed the assessment on 31 December 2009, determining taxable income at ₹115,89,54,044/- and balance tax payable at ₹44,31,32,567/-.
Separately, a survey under Section 133A was conducted on 25 March 2008 and a search under Section 132 was conducted on 1 April 2008 in the case of Shri Manoj Kumar Jain. According to the Revenue, various documents concerning transactions between Shri Manoj Kumar Jain and the assessee were recovered and impounded. While completing the assessee’s assessment, the Assessing Officer considered those documents and statements of Shri Manoj Kumar Jain and made an addition of ₹28 crore for AY 2008-09 in relation to alleged unaccounted transactions.
