INCOME TAX OFFICER, WARD-14(1), DELHI, NEW DELHI vs. REKHA THAKRAL, DELHI

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ITA 3340/DEL/2025Status: DisposedITAT Delhi29 January 2026AY 2018-193 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the CIT(A)/NFAC's decision to restrict the disallowance of bogus purchases to 6% was not illegal or irregular. The Tribunal acknowledged that various recent judicial precedents had decided the issue of bogus purchases with divergent views. However, the Tribunal found no fault with the lower appellate authority's discussion and conclusion in limiting the impugned bogus purchase disallowance to 6%. The Tribunal's reasoning appears to be based on the acceptance of the CIT(A)/NFAC's finding, which itself was influenced by the divergent views in various High Court and Tribunal decisions on the quantum of disallowance for bogus purchases. The ratio decidendi is that where there are divergent judicial views on the quantum of disallowance for bogus purchases, the appellate authority's decision to restrict it to a certain percentage, if not found illegal or irregular, would be upheld. The appeal filed by the Revenue was dismissed.

What were the facts?

This appeal by the Revenue concerns assessment year 2018-19, challenging an order passed by the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi. The NFAC's order was passed under Section 147 read with Section 144 of the Income-tax Act, 1961. The dispute revolves around the disallowance of bogus purchases amounting to Rs. 14,70,230/- allegedly sourced from M/s. Mudong Overseas. The Assessing Officer had disallowed the entire amount, but the NFAC restricted this disallowance to 6%. The assessee, Rekha Thakral, did not appear before the Tribunal, and the case proceeded ex-parte. The appeal was filed by the Income Tax Officer, Ward-14(1), Delhi.

What were the issues?

1. Whether the CIT(A)/NFAC erred in law and on facts by restricting the disallowance of bogus purchases of Rs. 14,70,230/- to 6% instead of the entire amount disallowed by the Assessing Officer, concerning proceedings under Section 147 read with Section 144 of the Income-tax Act, 1961. Assessee's contentions: Not recorded as the assessee remained ex-parte. Revenue's contentions: The CIT(A)/NFAC erred in law and on facts by restricting the disallowance of the assessee's entire bogus purchases of Rs. 14,70,230/- sourced from M/s. Mudong Overseas to only 6% of the said amount. The Revenue relied on various recent judicial precedents, including (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.

Which sections of the Income-tax Act were involved?

Section 147,Section 144

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘E’ NEW DELHI

Before: SHRI SATBEER SINGH GODARA & SHRI MANISH AGARWAL

Hearing: 29.01.2026Pronounced: 29.01.2026

ORDER

PER SATBEER SINGH GODARA, JM

1.

This Revenue’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/250/2024-25/1074863203(1), dated 22.03.2025 involving proceedings under section 147 r.w.s. 144 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).

Case called twice. None appears at the assessee’s/respondent’s behest. She is accordingly proceeded ex- parte.

2.

Learned departmental representative vehemently argues during the course of hearing that the CIT(A)/NFAC has erred in law and on facts in restricting the Assessing Officer’s action disallowing the assessee’s entire bogus purchases of Rs.14,70,230/- sourced from M/s. Mudong Overseas to the extent of 6% thereof only in the impugned lower appellate discussion.

3.

That being the clinching factual position, the Revenue could hardly dispute that 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 Vs. Tirupati Matsup (P.) Ltd. have recently decided the instant issue of bogus purchases with divergent views as well. We thus find no illegality or irregularity in the CIT(A)/NFAC’s lower appellate

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