SACHIN ARORA,DELHI vs. INCOME TAX OFFICER, DELHI

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ITA 5504/DEL/2026Status: DisposedITAT Delhi27 July 2026AY 2019-203 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal decided to allow a lumpsum disallowance of 5% of the alleged bogus purchases. This decision was made in the interest of justice and was explicitly stated not to be treated as a precedent.

What were the facts?

The assessee challenged the disallowance of purchases amounting to Rs. 30,67,310/- treated as bogus by the lower authorities. The assessee's sales were not questioned, and the possibility of cash turnover in his business could not be ruled out.

What were the issues?

Whether purchases treated as bogus by 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: CA (VC)
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.5504/Del/2026 Assessment Year:2019-20 Sh. Sachin Arora, Vs. ITO, H.No. 197, 2nd floor, Assessment Unit, Dr. Mukherjee Nagar, Delhi Delhi-110009

PAN: BMZPA1648G (Appellant) (Respondent)

Assessee by Sh. Rajender Handa, CA (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 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/250/2025-26/1084736714, dated

13.01.2026 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.5504/Del/2026

both the learned lower authorities’ action treating its purchases of

Rs.30,67,310/- in AY 2019-20, sourced from Mr. Daya Shankar,

Prop. Of Bhagwati Enterprises as bogus ones under section 69C

of the Act, in the assessment order dated 27.2.2024.

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 wherein possibility of cash turnover could not be

altogether ruled out. And that his corresponding sales have

nowhere been questioned. 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

Vs. Tirupati Matsup (P.) Ltd. have recently decided the instant

issue of bogus purchases with divergent views as well.

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ITA No.5504/Del/2026

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.30,67,310/-, 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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