Rose Industries vs. ITO

Parties Involved

Facts Summary

The assessee, Rose Industries, is engaged in the business of redrawing of copper wire and trading in copper wire, patta and strips and labour. The assessee filed its return of income for the year under consideration on 25.09.2010, declaring total income at Rs.1,39,942/-. The assessee’s case was reopened based on the information that the assessee was a beneficiary of accommodation entry by way of availing bogus bills from accommodation entry providers to the tune of Rs.1,94,35,436/-. The Assessing Officer passed the assessment order on 20.03.2015, determining total income at Rs.1,95,75,378/-, where the Assessing Officer made an addition at 100% of the alleged bogus purchases. The Assessing Officer also initiated penalty proceedings. The assessee appealed to the Commissioner of Income Tax (Appeals) and the Tribunal, which restricted the addition to 4% of the bogus purchases. The assessee further appealed to the Income Tax Appellate Tribunal, challenging the penalty order.…

Legal Issues

• 1. Whether penalty can be levied on an addition made on estimated basis?

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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