PURUSHOTTAM DASS,NEW DELHI vs. WARD 46(4), NEW DELHI

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ITA 6500/DEL/2026Status: DisposedITAT Delhi17 August 2026AY 2018-193 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal acknowledged the possibility of sourcing from unregistered dealers and the divergent views on bogus purchases. It decided to allow a lumpsum disallowance of 5% of the alleged bogus purchases, treating it as just and proper without setting a precedent.

What were the facts?

The assessee challenged the disallowance of purchases amounting to Rs. 11,00,000/-, which were 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 revenue authorities are to be fully disallowed, and the implications of sourcing from unregistered dealers.

Which sections of the Income-tax Act were involved?

Section 69C,Section 147,Section 144,Section 144B

AI-generated summary — verify with the full judgment below

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

Before: SHRI SATBEER SINGH GODARA

For Appellant: Ms. Ranita Kaur, AR (VC)
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.6500/Del/2026 Assessment Year: 2018-19 Vs. Income Tax Officer, Purushottam Dass, 440, Gali Sheesh Mahal, Ward 46(4), Bazar Sita Ram, Delhi- 06 Civic Centre, New Delhi- 02 PAN: AAHPD1433D (Appellant) (Respondent) Assessee by Ms. Ranita Kaur, AR (VC) 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 2018-19, 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/250/2024-25/1073862989(1), dated 28.02.2025 involving proceedings under section 147 r.w.s. 144 r.w.s. 144B of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).

Heard both the parties. Case file perused.

2.

Delay of 406 days in filing of the assessee’s instant appeal is condoned in larger interest of justice and in light of Collector, Land & Acquisition vs. Mst. Katiji & Others (1987) 167 ITR 471 (SC).

ITA No. 6500/Del/2026

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. 11,00,000/- in AY 2018-19, sourced from Shri Kishan Pal as bogus ones under section 69C of the Act, in the assessment order dated 27.03.2023, 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 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 2 | P a g e

ITA No. 6500/Del/2026 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 @ 5% of the assessee’s alleged bogus purchases amounting to Rs. 11,00,000/-, 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.

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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