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Facts
The assessee's appeal arose from an order concerning Assessment Year 2018-19, involving proceedings under Section 147 read with Section 144B of the Income Tax Act, 1961. The lower authorities disallowed purchases sourced from alleged entry providers. The assessee did not appear for the hearing and the case proceeded exparte.
Held
The Tribunal noted that the supplier admitted to being an accommodation entry provider. However, the assessee's sales and books of account were not rejected. The Tribunal deemed it appropriate to disallow a lump sum of 10% on the purchases, with the rider that this would not set a precedent.
Key Issues
Whether purchases from alleged entry providers, where the supplier admits to such, are to be disallowed entirely, or if a partial disallowance is appropriate when books of account are otherwise not rejected.
Sections Cited
147, 144B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI
Before: Sh. Satbeer Singh Godara
Asstt. Year : 2018-19 Pardeep Kumar V ITO C/o J B Sharma, Advocate 72, s Ward- 1 BMK, Market, NR Hotel, Hive, GT Panipat Road,Panipat (APPELLANT) (RESPONDENT) PAN No. ABJPK5684N Assessee by: None Revenue by : Sh. Manoj Kumar, Sr. DR Date of Hearing: 24.09.2025 Date of Pronouncement: 24.09.2025 ORDER This assessee’s appeal for Assessment Year 2018-19, arises against the CIT(A)/NFAC, Delhi’s DIN & order No. ITBA/NFAC/S/250/2025-26/107937854(1) dated 29.07.2025, in proceedings u/s 147 r.w.s. 144B of the Income Tax Act, 1961 (in short “the Act”).
Heard both the parties at length. Case file perused.
Case called twice but none appeared. At assessee’s behest it is accordingly proceeded exparte.
It next emerges with the able assistance from Revenue’s side that both the learned lower authorities have disallowed the assessee’s purchases as sourced from alleged entry providers to the tune of Rs.27,32,625/- followed by estimation of 2% commission expenditure to the tune of Rs.2603/-, as upheld in the lower appellate discussion.
Pardeep Kumar 5. Learned Departmental Representative vehemently argues in this factual matrix that supplier herein Sh. Rajesh Mittal had got recorded his statement before the GST authorities and admitted himself as an accommodation entry provider only. He could hardly dispute that both the lower authorities have neither rejected the assessee’s corresponding business sales nor his books of account all along. The necessary inference which would arise in such instance is that the assessee had actually sourced his purchases from unlisted dealers and availed accommodation entries from entry operators. It is thus deemed appropriate in larger interest of justice that a lump sum disallowance of 10% on the assessee’s foregoing purchases would be just and proper with a rider that the same would not be treated as a precedent. Necessary computation shall follow as per law.
This assessee’s appeal is partly allowed. Order Pronounced in the Open Court on 24/09/2025.