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Facts
The assessee's appeal for AY 2018-19 arose against the order involving proceedings under Section 143(3) of the Income-tax Act, 1961. The assessee remained absent during the hearing, and the case was proceeded ex-parte. The lower authorities had disallowed the assessee's alleged bogus purchases.
Held
The Tribunal found that the assessee failed to prove its purchases as genuine by providing cogent supportive evidence. Considering judicial precedents, the Tribunal deemed it appropriate to make a lumpsum disallowance of 5% of the impugned bogus purchases, without treating it as a precedent.
Key Issues
Whether the assessee has provided sufficient evidence to prove the genuineness of purchases, and if not, what would be the appropriate disallowance.
Sections Cited
143(3), 69C
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Income Tax Appellate Tribunal, DELHI BENCH: “SMC” NEW DELHI
Before: SHRI SATBEER SINGH GODARA
Assessment Year: 2018-19 GSS Pizza Circle Pvt. Ltd., Vs. NFAC, Plot No. 27, Upper Ground Delhi Floor, Road No. 44, Sagar Plaza-2, BLK-UG Rani Bagh Community Centre, Pitampura, Delhi PAN: AAFCG0515L (Appellant) (Respondent) Assessee by None Department by Sh. Manoj Kumar, Sr. DR Date of hearing 24.11.2025 Date of pronouncement 24.11.2025 ORDER This assessees’ 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/250/2025-26/1076196617(1), dated 14.05.2025 involving proceedings under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Case called twice. None appears at the assessee’s behest. It is accordingly proceeded ex-parte.
Learned departmental representative next vehemently argues during the course of hearing that both the lower authorities have rightly disallowed the assessee’s alleged bogus purchases @ 8% of Rs.4,24,32,456/-; coming to Rs.33,94,596/- under section 69C in assessment order dated 15.04.2021 as upheld in the lower appellate discussion. He accordingly prays that the same ought to be confirmed as the assessee had failed to prove the said purchases as genuine ones by filing its cogent supportive evidence.
This tribunal has given its thoughtful consideration to the assessee’s and the Revenue’s respective stands. Suffice to say, it is noticed from a perusal of the case records that no fault could be found in the learned lower authorities’ respective findings in principle since the assessee had failed to prove its purchases herein as genuine by way of relevant supportive evidence. There would be further no 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.
2 | P a g e 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 given facts that a lumpsum disallowance @ 5% of the assessee’s impugned bogus purchases 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.