REAL VALUE FOODS PRIVATE LIMITED,DELHI vs. ITO WARD-21(1), NEW DELHI
Facts
The assessee's appeal for Assessment Year 2019-20 challenges the lower authorities' action of treating purchases amounting to Rs.49,02,300/- and Rs.14,81,700/- as bogus under section 69C of the Act. The assessee is engaged in the construction business and there is no dispute regarding sales.
Held
The Tribunal acknowledged that while the assessee is in the construction business and some cash turnover is possible, the purchases were treated as bogus. Considering various judicial precedents with divergent views on bogus purchases, the Tribunal decided to allow a lump sum disallowance.
Key Issues
Whether the purchases sourced from certain traders can be treated as bogus, and if so, what would be the appropriate disallowance.
Sections Cited
69C, 147, 144
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH SMC, NEW DELHI
Before: Sh. Satbeer Singh Godara
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘SMC’, NEW DELHI Before Sh. Satbeer Singh Godara, Judicial Member ITA No. 9059/Del/2025 : Asstt. Year: 2019-20 Real Value Foods Pvt. Ltd., Vs Income Tax Officer, 204, B-9, Wason Chambers, Model Ward-21(1), Town, New Delhi-110009 New Delhi-110002 (APPELLANT) (RESPONDENT) PAN No. AAACR6000J Assessee by: Ms. Monalisa Maity, Adv. Revenue by : Sh. Manoj Kumar, Sr. DR Date of Hearing: 22.01.2026 Date of Pronouncement: 22.01.2026 ORDER This assessee’s appeal for Assessment Year 2019-20 arises against the CIT(A)/NFAC, Delhi’s DIN & order No. ITBA/NFAC/S/250/2025-26/1081984659(1) dated 24.10.2025, in proceedings u/s 147 r.w.s. 144 of the Income Tax Act, 1961 (in short “the Act”).
Hear both the parties at length. Case file perused.
It emerges during the course of hearing that the assessee raises his sole substantive ground challenging both the learned lower authorities’ action treating it’s purchases amounting to Rs.49,02,300/- sourced from M/s. Swastik Traders and Rs. 14,81,700/- from M/s Kalki Trading Company, as bogus under section 69C of the Act, in assessment order dated 28.03.2024 as upheld in the lower appellate discussion.
2 ITA No. 9059/Del/2025 Real Value Foods Pvt. Ltd. 4. 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 construction business all along wherein possibility of some cash turnover could not be altogether ruled out. And that his corresponding sales have nowhere been questioned in both the lower proceedings. Various recent judicial precedents (2025) 173 taxmann.com 592 (Guj.) RavjibhaiBecharbhaiDhamelia 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.
Faced with these peculiar facts, it is thus deemed appropriate in the larger interest of justice that a lump sum disallowance @ 8% of the assessee’s alleged bogus purchases amounting to Rs.63,84,000/- 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.
3 ITA No. 9059/Del/2025 Real Value Foods Pvt. Ltd. 6. No other ground or argument has been pressed.
This assessee’s appeal is partly allowed in above terms. Order Pronounced in the Open Court on 22/01/2026. Sd/- (Satbeer Singh Godara) Judicial Member Dated: 22/01/2026 *Subodh Kumar, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR
