M/S GROVER LIGHT SOURCE PVT. LTD,MEERUT vs. ITO, WARD 1(1)(3), MEERUT

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ITA 3343/DEL/2026Status: DisposedITAT Delhi27 July 2026AY 2018-193 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that if purchases and sales are treated as accommodation entries, only the commission element should be assessed. The Assessing Officer was directed to assess the sum total of alleged purchases and sales at 1% or the declared GP component, whichever is higher.

What were the facts?

The lower authorities treated the assessee's sales and purchases of Rs. 11,01,175/- and Rs. 7,85,091/- respectively with M/s. RCI Industries and Technologies Ltd. as bogus accommodation entries. The Revenue argued that this entity was a known accommodation entry provider.

What were the issues?

Whether the entire amount of sales and purchases treated as accommodation entries should be assessed, or only the commission element.

Which sections of the Income-tax Act were involved?

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: 02.07.2026Pronounced: 02.07.2026

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: “SMC” NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER ITA No.3343/Del/2026 Assessment Year: 2018-19 M/s. Grover Light Source Vs. Income Tax Officer, Pvt. Ltd., Ward-1(1)(3), E-38/39, Udyog Puram, Meerut Partapur, Meerut PAN: AAACG6782C (Appellant) (Respondent)

Assessee by Sh. Rohit Agarwal, CA Department by Sh. Manoj Kumar, Sr. DR

Date of hearing 02.07.2026 Date of pronouncement 02.07.2026 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/250/2025-26/1086139210(1), dated 17.02.2026 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.3343/Del/2026

2.

It emerges during the course of hearing with the able assistances coming from both the parties that the learned lower authorities have treated the assessee’s sales as well purchases involving M/s. RCI Industries and Technologies Ltd. amounting to Rs.11,01,175/- and Rs.7,85,091/- as bogus ones since representing mere accommodation entries. 3. The Revenue vehemently argues that the tribunal ought to uphold the same given the fact that the aforesaid entity has been found to be an accommodation entry provider of both sales and purchases to various parties including the assessee. 4. That being the case, this tribunal hardly finds any reason to accept the Revenue’s stand in entirety. It is made clear that once the assessee’s both purchases and sales have been treated as accommodation entries, it is not the entire sum but only the alleged commission element component therein which deserves to be assessed. The learned Assessing Officer is accordingly directed to assess the sum total of the assesee’s both alleged purchases as well as sales to that @ 1% only or the GP component whatever declared at its behest all along in the books of account; whichever is higher. Necessary computation shall follow as per law.

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ITA No.3343/Del/2026

It is further made clear that the instant estimation of assessee’s both purchases as well sales shall not be treated as a precent. 5. This assessee’s appeal is partly allowed. Order pronounced in the open court on 2nd July, 2026 Sd/- (SATBEER SINGH GODARA) JUDICIAL MEMBER Dated: 27th 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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