DEEPEN DRUGS,AHMEDABAD vs. THE ITO, WARD-1(2)(1), AHMEDABAD

ITA 208/AHD/2026Status: DisposedITAT Ahmedabad22 September 2026AY 2018-194 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that since the assessee is a trader and has established sales, and there's no allegation of purchases from unaccounted sources, only the profit element in the purchases can be added, not the entire amount. The addition was restricted to 10% of the disputed amount.

What were the facts?

The assessee made purchases of Rs. 22.97 lakhs from a party identified as a bogus entity. Despite providing purchase bills, sales bills, and confirmations, the Assessing Officer and CIT(A) treated the purchases as bogus and confirmed the addition.

What were the issues?

Whether entire purchases can be disallowed when sales are accepted and confirmed, and if the profit element alone should be taxed in such cases.

Which sections of the Income-tax Act were involved?

Section 69C,Section 115BBE

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD

Before: Shri Sanjay Garg & Shri Gangadhar Panda

For Appellant: Shri Shailesh Bhavsar, AR
Hearing: 17/08/2026Pronounced: 22/09/2026

Per Sanjay Garg, Judicial Member:

The present appeal has been preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals), [hereinafter referred to as ‘Ld. CIT(A)’] National Faceless Appeal Centre (in short “NFAC”), Delhi dated 29/11/2025 passed u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for the Assessment Year (AY) 2018-19. 2. The assessee has raised the following grounds of appeal:

“1. The Ld. CIT(A) erred in law and on facts in confirming the addition of Rs. 22,97,000 as unexplained expenditure unde

The order continues below.

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