SANDEEP KUMAR,NEW DELHI vs. ITO-WARD-1, PANIPAT/, PANIPAT

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ITA 191/DEL/2026Status: DisposedITAT Delhi09 February 2026AY 2018-19Bench: SHRI SATBEER SINGH GODARA (Judicial Member)1 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal acknowledged that the assessee is engaged in business and sourcing from unregistered dealers is not impossible, and their sales were not questioned. Considering the peculiar facts and in the larger interest of justice, a lumpsum disallowance of 6% of the alleged bogus purchases was deemed appropriate, with the rider that it should not be treated as a precedent. The assessee's book entries were rejected to the extent necessary for computation.

What were the facts?

The assessee's appeal for assessment year 2018-19 challenges the disallowance of purchases amounting to Rs. 26,81,300/-, sourced from M/s. Maa Karni Yarn, treated as bogus under section 69C of the Income-tax Act, 1961. The lower authorities upheld this disallowance. The assessee is in the business of manufacturing and trading blankets, and while sourcing from unregistered dealers is possible, their sales were not questioned.

What were the issues?

Whether the entire purchases sourced from a particular entity are to be treated as bogus and disallowed, and if not, what is the appropriate method for disallowance in cases where the assessee's sales are not questioned.

Which sections of the Income-tax Act were involved?

Section 69C,Section 147

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Cases cited in this judgment(5)Show list

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

Before: SHRI SATBEER SINGH GODARA

For Appellant: Adv. Ms. Jahanvi Khanna, Adv
Hearing: 09.02.2026Pronounced: 09.02.2026

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/250/2025-26/1083685153(1), dated 15.12.2025 involving proceedings under section 147 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 both the learned lower authorities’ action treating its purchases of Rs.26,81,300/- in AY 2018-19, sourced from the entity M/s. Maa Karni Yarn as bogus ones under section 69C of the Act, in the assessment order dated 24.03.2023, 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 manufacturing and trading of blankets 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 recent 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) Ltd; (2025) 178 taxmann.com 424 (Del. – Trib.) DCIT Vs. Kohinoor Foods Ltd.; and (2025) 177 taxmann.com 836 (Delhi-trib.) DCIT

1.

2 | P a g e 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.26,81,300/-, 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.

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