RAJESH KUMAR,DELHI vs. I.T.O WARD 34(5), NEW DELHI

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ITA 8576/DEL/2025Status: DisposedITAT Delhi21 January 2026AY 2018-20193 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal acknowledged that there is no dispute that the assessee is in the business of electrical goods and that the possibility of sourcing from unregistered dealers cannot be ruled out. It also noted that the assessee's sales have not been questioned. The Tribunal observed that various recent judicial precedents on the issue of bogus purchases have shown divergent views. Faced with these circumstances, the Tribunal decided, in the larger interest of justice, to allow a lumpsum disallowance at 8% of the alleged bogus purchases, amounting to Rs. 12,73,328/-. This decision is not to be treated as a precedent. The assessee's book entries are rejected to this extent, and necessary computation will follow as per law. No other ground or argument was pressed. The Tribunal expressly left undecided the question of whether the entire purchases were bogus.

What were the facts?

The assessee, Sh. Rajesh Kumar, has filed an appeal for Assessment Year 2018-19 against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi. The appeal challenges proceedings under section 147 of the Income-tax Act, 1961. The core dispute involves the disallowance of purchases amounting to Rs. 12,73,328/- made from M/s. Ninja Electrical Traders, which were treated as bogus by the Assessing Officer and upheld by the CIT(A)/NFAC. The assessee is engaged in the business of electrical goods, and his sales have not been questioned. A delay of 18 days in filing the appeal was condoned.

What were the issues?

1. Whether the purchases of Rs. 12,73,328/- made by the assessee from M/s. Ninja Electrical Traders in AY 2018-19 are to be treated as bogus, leading to their disallowance under section 69C of the Act? Assessee's Contention: The assessee argues that the purchases were genuine. While the possibility of sourcing from unregistered dealers exists, this does not automatically render the purchases bogus. The assessee's sales have not been questioned. Revenue's Contention: The revenue supports the disallowance of the purchases as bogus, as upheld by the lower authorities. The judgment notes that both parties reiterated their respective stands.

Which sections of the Income-tax Act were involved?

Section 69C,Section 147

AI-generated summary — verify with the full judgment below

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

Before: SHRI SATBEER SINGH GODARA

Hearing: 21.01.2026Pronounced: 21.01.2026

Date of hearing 21.01.2026 Date of pronouncement 21.01.2026 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/250/2025-26/1080977531(1), dated 22.09.2025 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.

Delay of 18 days in filing the asseessee’s instant appeal is condoned in larger interest of justice and in light of Collector, Land & Acquisition vs. Mst. Katiji & Others (1987) 167 ITR 471 (SC).

3.

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 his purchases of Rs.12,73,328/- in AY 2018-19, sourced from the entity M/s. Ninja Electrical Traders as bogus ones under section 69C of the Act, in the assessment order dated 09.03.2023, and upheld in the lower appellate discussion.

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 the business of electrical goods 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

2 | P a g e 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.

5.

Faced with these peculiar facts, it is thus deemed appropriate in the larger interest of justice that a lumpsum disallowance @ 8% of the assessee’s alleged bogus purchases amounting to Rs.12,73,328/-, 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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