ARHAM IRON LIMITED,NEW DELHI vs. ITO WARD 3(1), DELHI

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ITA 3340/DEL/2026Status: DisposedITAT Delhi31 July 2026AY 2019-203 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal acknowledged that sourcing from unregistered dealers was possible and that sales were not disputed. Considering divergent judicial views on bogus purchases, a lumpsum disallowance of 6% of the impugned purchases was deemed just and proper.

What were the facts?

The assessee's appeal concerns assessment year 2019-20, challenging the disallowance of purchases amounting to Rs. 75,53,225/- from M/s. Siddhi Ganesh Industries, treated as bogus. The assessee was engaged in wholesale trading of iron and steel, and their sales were not questioned.

What were the issues?

The primary issue was whether the purchases treated as bogus by the lower authorities were indeed so, and the appropriate disallowance in such cases.

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: ‘A’ NEW DELHI

Before: SHRI SATBEER SINGH GODARA & SMT. RENU JAUHRI

Hearing: 23.07.2026Pronounced: 23.07.2026

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘A’ NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SMT. RENU JAUHRI, ACCOUNTANT MEMBER ITA No.3340/Del/2026 Assessment Year: 2019-20 M/s. Arham Iron Ltd., Vs. Income Tax Officer, 1511/3, 2nd Floor, Wazir Ward-3(1), Nagar, Kotla Mubarakpur, New Delhi New Delhi PAN: AAACK0100G (Appellant) (Respondent) Assessee by None Department by Sh. Manoj Kumar, Sr. DR Date of hearing 23.07.2026 Date of pronouncement 23.07.2026 ORDER PER SATBEER SINGH GODARA, JM This assessee’s appeal for assessment year 2019-20, 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/250/2025-26/1085063969(1), dated 22.01.2026 involving proceedings under section 147 of the Income- tax Act, 1961 (hereinafter referred to as ‘the Act’). Case called twice. None appears at the assessee’s behest. It is accordingly proceeded ex-parte.

ITA No.3340/Del/2026

2.

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.75,53,225/- in AY 2019-20, sourced from M/s. Siddhi Ganesh Industries as bogus ones under section 69C of the Act, in the assessment order dated 28.02.2025, as upheld in the lower appellate discussion. 3. That being the case, both the parties vehemently reiterate their respective stands against and in support of the impugned bogus purchases disallowance. We wish to make it clear that there is no dispute in principle that the assessee is engaged in the business of wholesale trading of iron and steel 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 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)

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ITA No.3340/Del/2026

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. 4. 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. 75,53,225/-, 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. 5. This assessee’s appeal is partly allowed in above terms. Order pronounced in the open court on 23rd July, 2026 Sd/- Sd/- (RENU JAUHRI) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 31st July, 2026. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi

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