INCOME TAX OFFICER, NEW DELHI vs. ADVERMARK WIRESMITH PVT LTD, DELHI
Facts
The Revenue filed an appeal against the CIT(A)'s decision to delete the Assessing Officer's disallowance of Rs.17,82,500/- related to alleged bogus purchases by the assessee from M/s. R.K. Enterprises. The original proceedings were under Section 147 read with Section 144 of the Income-tax Act.
Held
Considering the divergent judicial precedents on bogus purchases, the Tribunal determined that a lumpsum disallowance of 5% of the alleged bogus purchases, amounting to Rs.17,82,500/-, was just and proper. This specific ruling is not to be treated as a precedent for future cases.
Key Issues
Whether the CIT(A) erred in deleting the disallowance of bogus purchases, and the appropriate extent of disallowance for such purchases.
Sections Cited
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
IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘E’ NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.3389/Del/2025 Assessment Year: 2016-17 Income Tax Officer, Vs. Advermark Wiresmith Pvt. Ltd. New Delhi 383, FIE, Patparganj Industrial Area, Delhi PAN: AAGCA8665C (Appellant) (Respondent) Assessee by Sh. K. Sampath, Adv. Sh. Rajkumar, Adv. Department by Sh. Yogeshwar Sharma, Sr. DR Date of hearing 29.01.2026 Date of pronouncement 29.01.2026 ORDER PER SATBEER SINGH GODARA, JM This Revenue’s appeal for assessment year 2016-17, 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/250/2024-25/1074956578(1), dated 24.03.2025, 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.3389/Del/2025
Learned departmental representative vehemently argues during the course of hearing that the CIT(A)/NFAC has erred in law and on facts in deleting the Assessing Officer’s action disallowing the assessee’s entire bogus purchases of Rs.17,82,500/- sourced from M/s. R.K. Enterprises. 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. 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.17,82,500/-, would be just and proper with a rider that the same shall not be treated as a precedent. Necessary computation shall follow as per law.
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ITA No.3389/Del/2025
This Revenue’s appeal is partly allowed. Order pronounced in the open court on 29th January, 2026 Sd/- Sd/- (MANISH AGARWAL) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 26th February, 2026. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi
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