LAXMI JOSHI,NEW DELHI vs. INCOME TAX OFFICER, NEW DELHI

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ITA 5491/DEL/2026Status: DisposedITAT Delhi27 July 2026AY 2017-183 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal decided that a lumpsum disallowance of 5% of the alleged bogus purchases would be just and proper, without setting a precedent. The assessee's book entries were rejected to this extent.

What were the facts?

The assessee's purchases of Rs. 39,27,406/- were treated as bogus by the lower authorities. The assessee is engaged in the wholesale trading of steel, and their corresponding sales were not questioned.

What were the issues?

Whether purchases from specific parties were bogus and the appropriate disallowance in such cases, considering divergent judicial views.

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

Before: SHRI SATBEER SINGH GODARA

For Appellant: Ms. Rajkumari, CA (Through VC)
Hearing: 08.07.2026Pronounced: 08.07.2026

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

BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER

ITA No.5491/Del/2026 Assessment Year:2017-18 Laxmi Joshi, Vs. INCOME TAX OFFICER, 92, 1st floor, Chilla, Mayur NATIONAL FACELESS Vihar, Phase-I Extension, East ASSESSMENT CENRE, Delhi, New Delhi – 110 091 DELHI – 110001 PAN: ACUPJ2817N (Appellant) (Respondent)

Assessee by Ms. Rajkumari, CA (Through VC) 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 2017-18, 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/250/2025-26/108797928411,

dated 27.03.2026 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.

2.

It emerges during the course of hearing that the assessee

presses for his sole substantive ground on merits challenging

ITA No.5491/Del/2026

both the learned lower authorities’ action treating its purchases of

Rs.39,27,406/- in AY 2017-18, sourced from M/s Disha Traders

and Sunrise Trading Co. as bogus ones under section 69C of the

Act, in the assessment order dated 19.5.2023, 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 trading in steel on wholesale basis etc. all along

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-trib.) DCIT

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ITA No.5491/Del/2026

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.39,27,406/-, 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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