Nagreeka Exports Limited vs. ITO, Circle-5(1), Kolkata

Parties Involved

Facts Summary

The assessee, Nagreeka Exports Limited, filed an income return for the Assessment Year 2009-10, declaring a total loss of ₹9,08,37,820/-. During the assessment proceedings, the Assessing Officer investigated various issues and made additions, primarily disallowing the replacement cost of combers and ring frames amounting to ₹3,13,43,120/- by treating it as capital expenditure instead of revenue expenditure. The Assessing Officer completed the assessment on 24.12.2011, determining the total income at an assessed loss of ₹5,37,19,502/-. Penalty proceedings were initiated, and a penalty order was passed on 27.08.2019 imposing a penalty of ₹55,15,159/- under section 271(1)(c) of the Income Tax Act, 1961. The assessee appealed against the penalty order to the Commissioner of Income Tax (Appeals), who upheld the penalty. Dissatisfied, the assessee filed an appeal before the Tribunal.…

Legal Issues

• 1. Whether the penalty imposed under section 271(1)(c) of the Income Tax Act, 1961 is justified.

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

Precedents Relied Upon

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