“bogus purchases”

DisallowancesSection 69CSection 69C9,532 judgments

The decision most relied on for bogus purchases is CIT v. Bholanath Poly Fab. Pvt. Ltd. (355 ITR 290), cited in 712 judgments on BharatTax.

Leading authorities on bogus purchases

CIT v. Bholanath Poly Fab. Pvt. Ltd.

355 ITR 290 · 2013 · High Court

712

citing judgments

If an assessee makes purchases from bogus parties, but the underlying goods are genuinely acquired and sold, only the profit margin embedded in such purchases, and not the entire value of the bogus purchases, should be added to the assessee's income.

Sanjay Oilcake Industries v. CIT

316 ITR 274 · 2009 · High Court

460

citing judgments

In cases of alleged bogus or unverifiable purchases, rather than disallowing the entire purchase value, a reasonable profit element or a proportionate percentage of the purchases should be added back to the assessee's income.

Vijay Proteins Ltd. v. Asst. CIT

58 ITD 428 · 1996 · ITAT

430

citing judgments

Where purchases are found to be non-genuine or fictitious, a reasonable disallowance of 25% of such purchases or the peak credit, whichever is higher, can be made. This is applied to address unexplained expenditure under Section 69C when actual goods are likely procured from the grey market.

CIT v. Odeon Builders Pvt. ltd.

418 ITR 315 · 2019 · Supreme Court

408

citing judgments

Income tax additions cannot be sustained merely on the basis of uncorroborated statements or allegations. The Revenue must bring on record sufficient material and allow the assessee to produce evidence to prove such additions.

Nikunj Eximp Enterprises v. CIT

216 Taxmann 171 · 2013 · High Court

325

citing judgments

Purchases may be treated as genuine even if the purchase parties are untraceable or not available for verification, as long as there is no specific evidence from the parties themselves denying the transactions or proving them to be bogus.

CIT v. Shyam R. Pawar

54 Taxmann.com 108 · 2015 · High Court

279

citing judgments

Transactions involving the purchase and sale of shares cannot be considered bogus where the assessee provides documentary evidence, unless the revenue brings substantial evidence on record to reject such proof. This principle is consistently applied in cases concerning claims of bogus long-term capital gains arising from penny stock transactions.

CIT v. Simit P. Seth

38 Taxmann.com 385 · 2013 · High Court

278

citing judgments

When an assessee obtains accommodation bills for purchases but the corresponding sales are genuine, the addition to income is limited to the gross profit margin embedded in such purchases. This principle acknowledges that the underlying sales were real, but profit was suppressed through bogus invoices.

CIT v. Vijay M. Mistry Construction Ltd.

355 ITR 498 · 2013 · High Court

252

citing judgments

In cases of alleged bogus or hawala purchases where the existence of transactions is not entirely denied, only the profit element embedded in such purchases, and not the entire purchase price, can be added to the assessee's income. The focus is on determining a reasonable profit percentage for such additions.

Judgments citing bogus purchases

Mr. Sirajuddin Abdul Samad Chuadhary, Pune vs. ITO Ward 9(1), Pune

In the result, the appeal filed by the assessee is allowed for statistical purposes

ITA 204/PUN/2025[2010-11]Status: DisposedITAT Pune23 Sept 2025AY 2010-11

Bench: Shri R. K. Pandaassessment Year : 2010-11

For Appellant: Shri Pratik SandbhorFor Respondent: Ms. Sailee Dhole, JCIT

Section 142(1)Section 144Section 147Section 148

NFAC dismissing the appeal for non-prosecution and thereby sustaining the addition of Rs.31,36,649/- made by the Assessing Officer on account of bogus purchases. 4. This is the second round of litigation before the Tribunal. Facts of the case, in brief, are that the assessee is an individual ... Rs.4,69,090/-. On the basis of information obtained from the Sales Tax Department that the assessee is one of the beneficiaries of bogus purchases amounting to Rs.31,36,649/-, the case of the assessee was reopened u/s 147 of the Income Tax Act, 1961 (hereinafter referred

Income Tax Officer 41(3)(3), Kautilya Bhavan, Bkc vs. Pravinchandra B Dedhia, Mumbai

In the result, the appeal filed by the assessee is allowed for statistical purposes

ITA 3776/MUM/2025[2012-13]Status: DisposedITAT Mumbai23 Sept 2025AY 2012-13

Bench: Shri Sandeep Gosain

Section 250Section 69C

interconnected and relates to challenging the order of Ld. CIT(A) in restricting the additions made u/s 69C of the Act @ 12% of the bogus purchases, therefore I have decided to adjudicate these grounds through the present consolidated order. 4. I have heard Ld. DR and perused the material placed ... business of trading and information was received from the Sales Tax Department that assessee has availed accommodating entries in the form of bogus purchases, accordingly addition @ 100% of bogus purchases was made by the AO while passing the order of assessment. It is important to mention here that assessee

Income Tax Officer-42(1)(3), Mumbai vs. Kartik Gunwantrai Shah, Mumbai

In the result, the appeal by the Revenue is allowed for statistical purposes

ITA 2182/MUM/2025[2009-10]Status: DisposedITAT Mumbai23 Sept 2025AY 2009-10

Bench: Shri Narendra Kumar Billaiyashri Sandeep Singh Karhailincome Tax Officer – 42(1)(3), Room No.735, 7Th Floor Kautilya Bhavan, Bandra Kurla Complex, Bandra (E), ............... Appellant Mumbai - 400051 V/S Kartik Gunwantrai Shah, Prop. Gati Solvochem, B-3, Jalaram, Ganjawala Lane, ……………… Respondent Borivali (West), Mumbai - 400092 Pan : Awaps4637D Assessee By : None Revenue By : Shri Vikas Chandra, Sr.Dr

For Appellant: NoneFor Respondent: Shri Vikas Chandra, Sr.DR

Section 142(1)Section 144Section 147Section 148Section 250Section 46A

facts and circumstances of the case and in law, the Ld. Addi. CIT(A) is erred in restricting the addition to 5% of the bogus purchases against the addition of 100% of bogus purchase of Rs. 3,51,358/-“. “On the facts and in the circumstances of the case ... information received from DGIT (Inv.), Mumbai, regarding certain persons who have been found by the Sales Tax Department, Maharashtra, to have provided entries of bogus purchase bills to a large number of taxpayers, it was noticed that assessee has obtained bills amounting to Rs.3,51,358/- from such entry providers

Bajrang Steel & Alloys Private Limited, Sundargarh vs. Principal Commissioner of Income Tax, Sambalpur

In the result, appeal of the assessee is allowed

ITA 553/CTK/2024[2018-19]Status: DisposedITAT Cuttack22 Sept 2025AY 2018-19

Bench: Shri George Mathan & Shri Rajesh Kumarआयकर अपील सं/Ita No.553/Ctk/2024 (निर्धारण वर्ा / Assessment Year : 2018-2019) Bajrang Steel & Alloys Private Vs Pcit, Sambalpur Limited Plot No:- 31, Kalunga, Near Kalunga High School, Sundergarh, 770031 Pan No. : Aaacm 2123 M (अपीलधर्थी /Appellant) .. (प्रत्यर्थी / Respondent) निर्धाररती की ओर से /Assessee By : Miss Sarmila Agarwal, Ca रधजस्व की ओर से /Revenue By : Shri Ashim Kumar Chakraborty, Cit-Dr सुनवाई की तारीख / Date Of Hearing : 22/09/2025 घोषणा की तारीख/Date Of Pronouncement : 22/09/2025

For Appellant: Miss Sarmila Agarwal, CAFor Respondent: Shri Ashim Kumar Chakraborty, CIT-DR

Section 115BSection 263Section 37(1)Section 69Section 69C

assessment came to be completed making an addition of Rs.60,33,481/- U/s. 37(1) of the Act on the ground of the bogus purchases. It was submission that the Ld. PCIT invoked its power u/s.263 of the Act on the ground that the AO in the show cause notice

Income Tax Officer, Mohali Punjab vs. Taj Land Developefrs and Promoters Private Limited, Sector Mohali Punjab

In the result, appeal is dismissed

ITA 606/CHANDI/2024[2011-12]Status: DisposedITAT Chandigarh22 Sept 2025AY 2011-12

Bench: Shri Rajpal Yadav & Shri Manoj Kumar Aggarwal

For Appellant: Shri Sudhir Sehgal, AdvocateFor Respondent: Smt. Kusum Bansal, CIT DR

Section 1Section 139Section 147Section 148Section 151

mind at all by the AO. The fallacies in the facts pointed out by the Id. counsel for the assessee, regarding the quantum of bogus purchases noted by the AO in his reasons as also name of one of the parties, has not been disputed or controverted by the Revenue

Jayantilal Rajmal Seth, Mumbai vs. DCIT-CC-4(3), Mumbai

ITA 3260/MUM/2025[2018-19]Status: DisposedITAT Mumbai22 Sept 2025AY 2018-19

Bench: Shri Om Prakash Kant () & Shri Raj Kumar Chauhan () Assessment Year: 2018-19 Jayantilal Rajmal Seth, Dcit-Cc-4(3), A-3, Saibaba Shopping Centre, Bkc, Mumbai-400051. Mumbai Central, Vs. Mumbai-400008. Pan No. Agepj 0499 E Appellant Respondent

For Appellant: Mr. Vivek Perampurna, CIT-DRFor Respondent: Mr. Jayant Bhat

Section 139(5)Section 148Section 263

stated that this company is engaged in the business of Mehta who stated that this company is engaged in the business of providing bogus purchases and sales bills. In response to the oviding bogus purchases and sales bills. In response to the oviding bogus purchases and sales bills. In response

Mr. Rohit Vallabhdas Shah, Mumbai vs. ITO Ward 32(3)(2), Mumbai

In the result, appeal of the assessee is dismissed

ITA 1910/MUM/2025[2010-11]Status: DisposedITAT Mumbai22 Sept 2025AY 2010-11

Bench: Shri Sandeep Gosain & Shri Girish Agrawalassessment Year: 2010-11 Rohit Vallabhdas Shah Income Tax Officer, B-303, Dwarka Apartment Ward 32(3)(2), Vs. Daulat Nagar, Borivali, Mumbai Mumbai – 400066 (Pan: Accps2392B) (Assessee) (Respondent) Present For: Assessee : Shri Gunjan Kakkad, Advocate Revenue : Shri Annavaram Kosuri, Sr. Dr Date Of Hearing : 22.07.2025 Date Of Pronouncement : 22.09.2025 O R D E R Per Girish Agrawal: This Appeal Filed By Assessee Is Against The Order Of Ld. Pcit-32, Mumbai, Vide Order Dated 25.03.2019 Passed Against The Assessment Order By Income Tax Officer, Ward-32(3)(2), Mumbai, U/S. 143(3) R.W.S. 147 Of The Income-Tax Act, 1961 (Hereinafter Referred To As The “Act”), Dated 17.06.2016 For Assessment Year 2010-11. 2. Grounds Taken By The Assessee Are Reproduced As Under: 1. On The Facts & Circumstances Of The Case & In Law, The Learned Commissioner Of Income-Tax Has Erred In Setting Aside The Assessment Order By Exercising Powers Under Section 263 Of The Income-Tax Act, 1961 ("The Act"). 2. On The Facts & Circumstances Of The Case & In Law, The Learned Commissioner Of Income-Tax Failed To Appreciate That The View Of The Assessing Officer Could Have Been Substituted In Exercise Of Powers Under Section 263 Of The Act. 3. On The Facts & Circumstances Of The Case & In Law, The View Taken By The Assessing Officer Was A Plausible View & Thus, The Commissioner Has Erred In Invoking The Powers Under Section 263 Of The Act. 4. On The Facts & Circumstances Of The Case & In Law, The Commissioner Could Not Have Set Aside The Assessment Order.

For Appellant: Shri Gunjan Kakkad, AdvocateFor Respondent: Shri Annavaram Kosuri, Sr. DR

Section 133(6)Section 143(3)Section 147Section 148Section 263

bogus bills to earn commission without actually entering into real business. Ld. Assessing Officer alleged that assessee is one of such beneficiaries of obtaining bogus purchases from the following parties:- 3.3. Thus, ld. Assessing Officer formed a reason to believe that income had escaped assessment within the meaning of section ... invoked revisionary proceedings by issuing a show cause notice u/s.263 on 30.01.2019, whereby he drew his consideration that ld. Assessing Officer has accepted the bogus purchase bills from bogus hawala bill providers and made an addition only to the extent of 12.5% of these total bogus purchases whereas the addition

Goodluck Metal Corporation, Mumbai vs. Assessing Officer, Mumbai

In the result, the appeal of the assessee is dismissed

ITA 1771/MUM/2025[2009-10]Status: DisposedITAT Mumbai22 Sept 2025AY 2009-10

Bench: Shri Om Prakash Kant () & Shri Raj Kumar Chauhan () Assessment Year: 2009-10 Goodluck Metal Corporation, Assessing Officer Circle 19(1), 98, Khetwadi Main Road, Piramal Chamber, Mumbai-400 004. Vs. Mumbai-400012. Pan No. Aaafg 1441 R Appellant Respondent

For Respondent: Mr. Sanjiv Shah, Adv

Section 132Section 143(1)Section 147Section 153A

entities were used mainly for giving accommodation entries, bogus were used mainly for giving accommodation entries, bogus were used mainly for giving accommodation entries, bogus purchases and loans and advances to various beneficiaries. hases and loans and advances to various beneficiaries. hases and loans and advances to various beneficiaries

ITO 19.3.1, Mumbai vs. Salem Steel Industries, Mumbai

The appeal of the revenue is dismissed

ITA 1299/MUM/2025[2008-09]Status: DisposedITAT Mumbai22 Sept 2025AY 2008-09

Bench: Shri Saktijit Dey, Vp & Ms Padmavathy S, Am

For Appellant: Shri Swapnil Choudhary, CIT-DRFor Respondent: None

Section 250Section 37Section 68Section 69CSection 74

under: “1." Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in restricting the bogus purchases @ 25% as against 100% addition of Rs. 37,35,984/- made by the AO u/s 69C of the Income-Tax Act, 1961, on account ... bogus purchases from M/s. Shree Sundha Steels Pvt. Ltd and M/s. Metalex Tube Industries, both are found to be fictitious concerns, involved in providing on bogus bills for the alleged purchases purportedly made by the assessee ?" 2. "Whether on the facts and circumstances of the case

Rasiklal Lavchand Vora, Thane vs. ACIT - Central Circle 1, Thane

In the result, the appeal filed by the revenue is allowed for statistical purposes

ITA 5983/MUM/2024[2013-14]Status: DisposedITAT Mumbai22 Sept 2025AY 2013-14

Bench: Shri Sandeep Gosain

Section 144Section 147Section 250Section 44ASection 69C

record and also the orders passed by the revenue authorities. I noticed that as per record, the additions were made by AO once of bogus purchases made from bogus parties and thus purchases were treated as unexplained. However on appeal Ld. CIT(A) deleted the same by holding as under

Rasiklal Vora, Thane vs. ACIT - Central Circle -1, Thane

In the result, the appeal filed by the revenue is allowed for statistical purposes

ITA 5982/MUM/2024[2016-17]Status: DisposedITAT Mumbai22 Sept 2025AY 2016-17

Bench: Shri Sandeep Gosain

Section 144Section 147Section 250Section 44ASection 69C

Rasiklal Vora, Thane vs. ACIT, Central 1, Thane

In the result, the appeal filed by the revenue is allowed for statistical purposes

ITA 5981/MUM/2024[2015-16]Status: DisposedITAT Mumbai22 Sept 2025AY 2015-16

Bench: Shri Sandeep Gosain

Section 144Section 147Section 250Section 44ASection 69C

Pawan Kumar Agarwal, New Delhi vs. ACIT, Circle-36(1), New Delhi

ITA 3658/DEL/2023[2016-17]Status: DisposedITAT Delhi22 Sept 2025AY 2016-17

Bench: Shri Satbeer Singh Godara & Shri Naveen Chandraassessment Year: 2016-17 Vs. Acit, Sh. Pawan Kumar Agarwal, A-4/2, Rana Pratap Bagh, Circle-36(1), New Delhi New Delhi Pan: Adupa9815A (Appellant) (Respondent) With Assessment Year: 2016-17 Vs. Sh. Pawan Kumar Agarwal, Ito, Ward-17(1), A-4/2, Rana Pratap Bagh, New Delhi New Delhi Pan: Adupa9815A (Appellant) (Respondent) Assessee By Sh. Satish Agarwal, Ca Ms. Anju Sharma, Ca Department By Sh. Jitender Singh, Cit(Dr) Date Of Hearing 20.08.2025 Date Of Pronouncement 22.09.2025 Order Per Satbeer Singh Godara, Jm These Assessee’S & Revenue’S Cross Appeals

Section 143(3)Section 69A

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘A’ NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI

ITO, Mumbai vs. Shemon Jewels, Mumbai

ITA 2049/MUM/2025[2014-15]Status: DisposedITAT Mumbai19 Sept 2025AY 2014-15

Bench: SHRI PAWAN SINGH (Judicial Member), SHRI ARUN KHODPIA (Accountant Member)

Section 250Section 254(1)Section 37Section 74

lead matter, reads as under: “1. “Whether the facts and circumstances of this case and in law, Id. CIT(A) has erred in restricting bogus purchase only to the extent upto 3% as against the 100% addition made by the AO, on account of bogus purchases transaction ... Bhanwarlal Jain Group ?” 2. “Whether on the facts and circumstances of the case and in law, Ld CIT(A) has erred in restricting bogus purchase only to the extent upto 3% as against 100% addition of Rs. 1,23,69,248/-by ignoring the fact that action of Assessing officer

Income Tax Officer-19(3)(1), Mumbai vs. Shemon Jewels, Mumbai

ITA 2048/MUM/2025[2012-13]Status: DisposedITAT Mumbai19 Sept 2025AY 2012-13

Bench: SHRI PAWAN SINGH (Judicial Member), SHRI ARUN KHODPIA (Accountant Member)

Section 250Section 254(1)Section 37Section 74

Amee Govindbhai Patel, Mehsana vs. The Income Tax Officer, Ward-1, Mehsana

In the result, the appeal of the assessee is, therefore, allowed in above terms

ITA 120/AHD/2024[2016-17]Status: DisposedITAT Ahmedabad18 Sept 2025AY 2016-17

Bench: Shri Sanjay Garg & Smt. Annapurna Gupta

For Appellant: Respondent byFor Respondent: Shri Abhijit, Sr. DR

Section 147Section 250Section 68Section 69A

from account holders. During enquiry it was found that Amit Shah is an entry operator who used to provide accommodation entries of unsecured loans, bogus purchases, expenses, etc. Details of bank accounts operated by him alongwith his brother were obtained from the bank and it was found that the assessee ... above facts it can be inferred that assessee was having unaccounted money which was laundered and introduced in the form of unsecured loans, bogus purchases, expenses, etc. The assessee ought to have disclosed income received by oil means by filing return of income for the year under consideration. 4. From

ITO Ward 17(2)(1), Mumbai vs. Bhupesh Sevantilal Shah, Mumbai

In the result, appeal of the revenue is dismissed

ITA 4772/MUM/2025[2010-11]Status: DisposedITAT Mumbai18 Sept 2025AY 2010-11

Bench: Shri Saktijit Dey, Hon’Ble & Shri Narendra Kumar Billaiya, Hon’Ble

For Appellant: Shri P.P. Jayaram (virtually appeared)For Respondent: Shri Leyaqat Ali Aafaqui, Sr. A/R

Section 143(3)Section 271(1)(c)

penalty levied by the AO u/s 271(1)(c) of the Act on the confirmed quantum addition to the extent of 7.5% of bogus purchases. 3. The roots for the levy of penalty lie in the assessment order framed u/s 143(3) r.w.s. 147 of the Act by which ... returned income of the assessee at Rs. 75,04,580/- was assessed at Rs. 81,62,012/- after making addition on account of bogus purchases of Rs. 5,29,672/-. 4. Briefly stated the facts of the case are that during the course of scrutiny assessment proceedings, the AO noticed

Yadav Rice Mills, Muktsar vs. Deputy Commissioner of Income Tax, Circle-2, Bathinda

In the result, the appeal filed by the assessee is allowed

ITA 415/ASR/2024[2012-13]Status: DisposedITAT Amritsar17 Sept 2025AY 2012-13

Bench: Sh. Manoj Kumar Aggarwal & Sh. Udayan Dasgupta

For Appellant: Sh. Ashwani Kumar, Ms. Deepali Aggarwal

Section 131Section 143(1)Section 143(3)Section 147Section 148Section 151Section 250Section 68Section 69C

section 143(1), Assessing Officer could initiate reassessment proceedings subsequently on basis of information supplied by Investigation wing of department that assessee had taken bogus purchase entries from two parties. 6 I.T.A. No. 415/Asr/2024 Assessment Year: 2012-13 (ii) Backbone Projects Ltd. vs. ACIT [2021] 131 taxmann.com 80 (Gujarat ... taken. It was also stated by him that he has provided accommodation entries in respect of bogus sales and as well as towards bogus purchases by either accepting credits by way of cheques/RTGS, etc or by way of giving debits through cheques & RTGS and sometimes, the transactions are done

Sharad Kumar Singh, Kolkata vs. ACIT, Cir. 37(1), Kolkata

In the result, the appeal of the is partly allowed

ITA 692/KOL/2024[2013-14]Status: DisposedITAT Kolkata17 Sept 2025AY 2013-14

Bench: Shri Rajesh Kumar, Am & Shri Pradip Kumar Choubey, Jm Acit, Sharad Kumar Singh Circle-3(1), Income Tax Office 10A, Norode Behari Mullick Road, 3, Government Place, Vs. Kolkata-700006, West Bengal West Bengal-700001 (Appellant) (Respondent) Pan No. Alqps3842K Assessee By : Shri Sunil Surana, Ar Revenue By : Shri Kapil Mondal, Dr Date Of Hearing: 22.07.2025 Date Of Pronouncement: 17.09.2025

For Appellant: Shri Sunil Surana, ARFor Respondent: Shri Kapil Mondal, DR

Section 195Section 40Section 40A(3)

interest of the Revenue. The ld. AO has not recorded any finding as to the unreasonable profit or recorded any finding as to the bogus purchases. The total purchases of the assessee were more than 26.00 crores and the total cash payments were only 1.17 crores which is less than

Dodhia Synthetics Limited, Bhiwandi vs. DCIT-CC-3, Thane

The appeal of the assessee is Allowed on the

ITA 2190/MUM/2025[2013-14]Status: DisposedITAT Mumbai17 Sept 2025AY 2013-14

Section 143(3)Section 147Section 250Section 68

raised by the assessee in the written submissions before us or before lower authorities. Disallowance u/s 37(1) of the Act on account of bogus purchases. [Relevant for AY 2014-15 and AY 2015-16] 42. On this issue, both the parties have filed cross appeals. We noted that ... seized bundle number 3,8 and 9 from the premises of Shri Divesh Dhanani, the Assessing Officer has made an addition on account of bogus purchases by assessee from V.V. Dyechem P Limited. It is submitted by the assessee that during the assessment proceedings to prove the genuineness