Vijayalaxmi Cashew Company vs. ACIT, Circle - 1

Parties Involved

Facts Summary

The assessee, Vijayalaxmi Cashew Company, was found by the Assessing Officer (AO) to have made sales of cashew nuts to its sister concern at a price less than the cost of production. The AO made an addition of Rs.3,90,047/- to the total income of the assessee and imposed a penalty of Rs.1,20,525/- under section 271(1)(c) of the Income Tax Act. The order of the AO was confirmed by the Commissioner of Income Tax (Appeals) [CIT(A)]. The assessee appealed against the order of the CIT(A) before the Income Tax Appellate Tribunal (ITAT). The Tribunal set aside the penalty imposed by the AO and deleted the penalty levied u/s 271(1)(c) of the Act.…

Legal Issues

• 1. Whether the penalty imposed by the AO under section 271(1)(c) of the Income Tax Act was justified.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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