SANDEEP SINGH,BHIWANI vs. ITO WARD -1, BHIWANI

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ITA 5028/DEL/2026Status: DisposedITAT Delhi27 July 2026AY 2019-203 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal decided to make a lumpsum disallowance of 5% of the alleged bogus purchases. This disallowance is not to be treated as a precedent.

What were the facts?

The assessee's purchases of Rs. 15,80,242/- were treated as bogus by the lower authorities. The assessee is engaged in construction business, and their corresponding sales were not questioned.

What were the issues?

Whether purchases treated as bogus by the revenue authorities are indeed bogus, and if so, what is the appropriate disallowance.

Which sections of the Income-tax Act were involved?

Section 69C,Section 147,Section 144

AI-generated summary — verify with the full judgment below

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

For Appellant: Adv. &
Hearing: 08.07.2026Pronounced: 08.07.2026

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: “SMC” NEW DELHI

BEFORESHRI SATBEER SINGH GODARA, JUDICIAL MEMBER

ITA No.5028/Del/2026 Assessment Year:2019-20 SANDEEP SINGH, Vs. INCOME TAX OFFICER, Prop. Sandeep Singh WARD-1, Contractor, BHIWANI, 37, Devi Lal Colony, HARAYANA Bhiwani, Haryana-127021 PAN: ARIPS8770Q (Appellant) (Respondent)

Assessee by Sh. Somil Agarwal, Adv. & Sh. Deepesh Garg, Adv. Department by Sh. Nirmal Nangia, Sr. DR Date of hearing 08.07.2026 Date of pronouncement 08.07.2026

ORDER 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/250/2026-27/1088504779(1),

dated 17.04.2026 involving proceedings under section 147 r.w.s.

144 of the Income-tax Act, 1961 (hereinafter referred to as ‘the

Act’).

Heard both the parties. Case file perused.

ITA No.5028/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.15,80,242/- in AY 2019-20, sourced from Mr. Sanjay Jain as

bogus ones under section 69C of the Act, in the assessment order

dated 27.2.2025, and 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. I wish to make it clear that there

is no dispute in principle that the assessee is engaged in the

business of construction wherein possibility of cash turnover in

such an unorganized activity could not be altogether ruled out.

And that his corresponding sales have nowhere been questioned

in both the lower proceedings. Various recent 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-

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ITA No.5028/Del/2026

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 @ 5% of the assessee’s alleged bogus purchases

amounting to Rs.15,80,242/-, 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.

5.

This assessee’s appeal is partly allowed in above terms.

Order pronounced in the open court on 8th July, 2026.

Sd/- (SATBEER SINGH GODARA) JUDICIAL MEMBER Dated: 27th July, 2026. SR BHATNAGAR Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi

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