Case Law Details
Dombivali Paper Mfg. Co. Pvt. Ltd Vs ACIT (ITAT Mumbai)
The Income Tax Appellate Tribunal (ITAT) Mumbai recently rendered a decision in the case of Dombivali Paper Mfg. Co. Pvt. Ltd vs. ACIT, addressing the imposition of a penalty under Section 271(1)(c) of the Income Tax Act, 1961. This analysis aims to provide insights into the facts, arguments, and the tribunal’s reasoning leading to the decision.
Background: The appellant, engaged in the manufacture of craft paper, filed its return of income for A.Y. 2011-12, declaring total income of Rs. 1,34,48,577. The case was reopened based on information from the Sales Tax Department, alleging bogus purchases. The Assessing Officer (AO) made an addition of Rs. 7,17,020 as a result of accommodation entries during the financial year 2010-11.
Assessment and Appeal: The AO completed the assessment under Section 143(3) read with section 147, and the CIT(A) confirmed the addition. The ITAT partially allowed the appeal, restricting the addition to 12.5% of the alleged bogus purchases (Rs. 89,628) in a previous order dated 25.03.2019.
Penalty Proceedings: Subsequently, the AO imposed a penalty of Rs. 2,38,176 under Section 271(1)(c) on 29.03.2018. The appellant challenged this penalty order before the CIT(A), which was dismissed on 09.06.2023. The present appeal is against the confirmation of the penalty.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
