MAHESH CHAND,DELHI vs. INCOME TAX OFFICER, DELHI

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ITA 8084/DEL/2025Status: DisposedITAT Delhi19 January 2026AY 2019-20Bench: SHRI SATBEER SINGH GODARA (Judicial Member)1 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal acknowledged that the assessee is in the advertising and printing business and that sourcing from unregistered dealers is possible. While the sales were not questioned, the book entries for purchases were rejected to the extent of alleged bogus purchases.

What were the facts?

The assessee's appeal pertains to AY 2019-20, challenging the disallowance of expenses amounting to Rs. 13,23,420/- for purchases treated as bogus. The lower authorities upheld the disallowance under section 69C of the Income-tax Act, 1961.

What were the issues?

Whether the disallowance of purchases treated as bogus by the lower authorities was justified, and if so, to what extent.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 69C

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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

Hearing: 19.01.2026Pronounced: 19.01.2026

Date of hearing 19.01.2026 Date of pronouncement 19.01.2026 ORDER This assessee’s appeal for assessment year 2019-20, 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/250/2025-26/1081855335(1), dated 17.10.2025 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.

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 his unexplained expenditure towards “purchases” of Rs.13,23,420/- in AY 2019-20, sourced from the entity M/s. Metrix Industries as bogus one under section 69C of the Act, in the assessment order dated 04.03.2025, 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 advertising and printing 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 Vs. Tirupati

2 | P a g e 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 @ 10% of the assessee’s alleged bogus purchases amounting to Rs.13,23,420/-, 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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