RAMESH CHAWLA,CHANDNI CHOWK, DELHI vs. INCOME TAX OFFICER, D. S. BUILDING, DELHI

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ITA 6350/DEL/2026Status: DisposedITAT Delhi17 August 2026AY 2020-214 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal decided to allow a lumpsum disallowance of 6% on the alleged bogus purchases, stating it would be just and proper. This decision was made without setting a precedent.

What were the facts?

The assessee challenged the disallowance of purchases amounting to Rs. 11,08,765/- treated as bogus by the lower authorities. The assessee is in the business of wholesale industrial chemicals, and their sales were not questioned.

What were the issues?

Whether purchases treated as bogus by the revenue authorities are indeed bogus and if a lumpsum disallowance is appropriate.

Which sections of the Income-tax Act were involved?

Section 69C,Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: “SMC” NEW DELHI

Before: SHRI SATBEER SINGH GODARA

Hearing: 03.08.2026Pronounced: 03.08.2026

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: “SMC” NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER ITA No.6350/Del/2026 Assessment Year: 2020-21 Vs. Income Tax Officer, Ramesh Chawla 585, First Floor, Glai Range Code 58, Ward 47(1), Ghanteshwar Katra Neel, D. S. Building, Delhi- 06 Chandni Chowk, Delhi- 11006 PAN: AALPC9165B (Appellant) (Respondent) Assessee by Sh. Sahil Ansari, AR Department by Sh. Manoj Kumar, Sr. DR

Date of hearing 03.08.2026 Date of pronouncement 03.08.2026 ORDER This assessee’s appeal for assessment year 2020-21, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2025-26/1081502917(1), dated 07.10.2025 involving proceedings under section 147 of the Income- tax Act, 1961 (hereinafter referred to as ‘the Act’).

Heard both the parties. Case file perused.

ITA No. 6350/Del/2026

2.

For the reasons stated in the assessee’s/Revenue’s condonation averments, delay of 155 days in filing of the instant appeal is condoned in light of Collector, Land & Acquisition vs. Mst. Katiji & Others (1987) 167 ITR 471 (SC).

3.

It emerges during the course of hearing that the assessee presses for his sole substantive ground on merits challenging both the learned lower authorities’ action treating its purchases of Rs. 11,08,765/- in AY 2020-21, sourced from the entity M/s. Kapoor Watch Group and others as bogus ones under section 69C of the Act, in the assessment order dated 29.03.2025, and upheld in the lower appellate discussion.

4.

That being the case, both the parties vehemently reiterate their respective stands against and in support of the impugned bogus purchases disallowance. I wish to make it clear that there is no dispute in principle that the assessee is engaged in the business of wholesale of industrial chemical all along wherein possibility of assessee sourcing its purchases from unregistered dealers per se could not be altogether ruled out as well. And that his corresponding sales have nowhere been questioned in both the 2 | P a g e

ITA No. 6350/Del/2026

lower proceedings. Various recent judicial precedents (2025) 173 taxmann.com 592 (Guj.) Ravjibhai Becharbhai Dhamelia vs. ACIT; (2024) 160 taxmann.com 110 (Bom) PCIT Vs. Hitesh Mody (HUF), (2024) 160 taxmann.com 93 (Del) PCIT Vs. Forum Sales (P) Ltd.; (2025) 172 taxmann.com 283 (Bom) PCIT Vs. Kanak Impex (India) Ltd; (2025) 178 taxmann.com 424 (Del. – Trib.) DCIT Vs. Kohinoor Foods Ltd.; and (2025) 177 taxmann.com 836 (Delhi-trib.) DCIT Vs. Tirupati Matsup (P.) Ltd. have recently decided the instant issue of bogus purchases with divergent views as well.

5.

Faced with these peculiar facts, it is thus deemed appropriate in the larger interest of justice that a lumpsum disallowance @ 6% of the assessee’s alleged bogus purchases amounting to Rs. 11,08,765/-, would be just and proper with a rider that the same shall not be treated as a precedent. The assessee’s book entries are hereby rejected to the very extent. Necessary computation shall follow as per law.

No other ground or argument has been pressed.

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ITA No. 6350/Del/2026

6.

This assessee’s appeal is partly allowed in above terms. Order pronounced in the open court on 03.08. 2026.

Sd/- (SATBEER SINGH GODARA) JUDICIAL MEMBER Dated: 17.08.2026 Pooja Mittal/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi

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