“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

ITO-31(1)(1), Mumbai vs. Sampada Santosh Patkar, Mumbai

In the result, the appeal filed by the revenue stands dismissed

ITA 1533/MUM/2025[2010]Status: DisposedITAT Mumbai27 May 2025

Bench: Hon’Ble Shri Sandeep Gosainito-31(1)(1), Mumbai Vs. Sampada Santosh 254C, Kautilya Bhavan, Patkar Bkc, Mumbai – 400051. E/204 Trans Residency Chs, Midc Road No. 23, Andheri East, Mumbai – 400093. Pan/Gir No. Aalpp0794M (Applicant) (Respondent)

Section 144Section 250

grounds raised by the revenue are interconnected and interrelated and relates to challenging order of Ld.CIT(A) in restricting the additions on bogus purchases from 100% to 10%, without appreciating the facts of the case therefore I have decided to adjudicate these grounds through the present consolidated order ... account by such tainted entities. 3. Therefore, AO completed the assessment u/s 144 of the Act in which the entire purchases were treated as bogus purchases and had been disallowed. However, during the appeal, the assessee submitted all the required documents in order to prove that the purchases were legitimate

Madhav Desai, Mumbai vs. Assessing Officer, Piramal Chambers

In the result, the appeal of the assessee stands partly allowed

ITA 4871/MUM/2024[2011-2012]Status: DisposedITAT Mumbai27 May 2025AY 2011-2012

Bench: Hon’Ble Shri Sandeep Gosainmadhav Desai Vs. Ito, Ward – 28(2)(1) Ground Floor, Room No. 1 Piramal Chambers, 39/41, Prankuti Bldg Parel, Mumbai. 4Th Kumbharwada, Mumbai Pan/Gir No. Ajjpd5013E (Applicant) (Respondent)

Section 147Section 250Section 41(1)

interconnected and interrelated and relates to challenging the order of Ld. CIT(A) in confirming the addition made by AO @12.5% of bogus purchases. 5. I have heard the counsels for both the parties, perused the material placed on record, judgements cited before me and also the orders passed ... reopened on the basis of information received from DGIT(Inv), Mumbai. From the investigation, it was found that the assessee had indulged in making bogus purchases amounting to Rs.26,94,526/- from four parties. Therefore, after providing opportunity of hearing to the assessee and relying upon the judgement

ITO-41(1)(3), Mumbai vs. Mulchand Ramajor Gupta, Mumbai

In the result, the appeal of the Revenue is dismissed

ITA 493/MUM/2025[2011]Status: DisposedITAT Mumbai23 May 2025

Bench: SHRI PAWAN SINGH (Judicial Member)

Section 143(1)Section 144Section 148Section 254(1)Section 69C

Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in restricting the disallowance of bogus purchases to 15% as against 100% by the assessing officer in order u/s 144 r.w.s. 147 of the IT Act? 2. Whether on the facts ... Ramanand Sale Services which were shown in the list of bogus/Hawala purchases. Thereby, the AO disallowed/treated purchases of Rs. 17,92,350/- as bogus purchases and added under section 69C. 3. Aggrieved by the additions in the assessment order, the assessee filed appeal before Ld. CIT(A). Before

Pr. Commissioner of Income Tax -Central Ludhiana vs. M/S. Garg Acrylics Ltd

ITA/178/2023HC Delhi22 May 2025

Bench: HON'BLE MR. JUSTICE VIBHU BAKHRU,HON'BLE MR. JUSTICE TEJAS KARIA

For Appellant: Mr.Debesh Panda, SSCFor Respondent: Mr.Rohit Jain, Advocate

Section 143(3)Section 145(3)Section 260ASection 68

circumstances of the case and in law, the ITAT has erred in deleting the addition of Rs.20,24,39,341/- made on account of bogus purchases and sales? B. Whether on the facts and in the circumstances of the case and in law, the ITAT has erred in holding that ... appeal was admitted and was confined to the questions of law relating to the addition of ₹20,24,39,341/- made on account of bogus purchases and sales. 11. The relevant facts relating to addition of ₹20,24,39,341/- are as Digitally Signed By:RAM KUMAR Signing Date

Krupalu Metals P. Ltd., Jamnagar vs. The NFAC CIT(A), Delhi

In the result, assessee’s appeal ITA No

ITA 113/RJT/2024[2015-16]Status: DisposedITAT Rajkot22 May 2025AY 2015-16

Bench: Dr. Arjun Lal Saini & Shri Dinesh Mohan Sinhaआयकरअपीलसं/.Ita Nos.111 To 113/Rjt/2024 "नधा"रणवष" /Assessment Years: 2013-14 To 2015-16

For Appellant: Shri Sarvesh Gohil, Ld. ARFor Respondent: Shri Abhimanyu Singh Yadav, Ld. Sr-DR

Section 147Section 250

Rajasthan High Court in the case of Vimal Singhvi Vs ACIT (2015) (55 taxmann.com 309) (Rajasthan) has upheld that where assessee recorded bogus purchases and, moreover, values of opening stock/closing stock were not open for verification, authorities below were justified in rejecting books of account and making addition to assessee

Krupalu Metals P. Ltd., Jamnagar vs. The NFAC Delhi, Delhi

In the result, assessee’s appeal ITA No

ITA 112/RJT/2024[2014-15]Status: DisposedITAT Rajkot22 May 2025AY 2014-15

Bench: Dr. Arjun Lal Saini & Shri Dinesh Mohan Sinhaआयकरअपीलसं/.Ita Nos.111 To 113/Rjt/2024 "नधा"रणवष" /Assessment Years: 2013-14 To 2015-16

For Appellant: Shri Sarvesh Gohil, Ld. ARFor Respondent: Shri Abhimanyu Singh Yadav, Ld. Sr-DR

Section 147Section 250

M/S. Anam Pesticides Pvt.Ltd., Ahmedabad vs. The Income Tax Officer, Ward-1(1)(1), Ahmedabad

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 1444/AHD/2024[2021-22]Status: DisposedITAT Ahmedabad22 May 2025AY 2021-22

Bench: Smt. Annapurna Gupta & Shri Siddhartha Nautiyal

For Appellant: Shri Ummed Kuntal, A.RFor Respondent: Shri Rignesh Das, Sr. DR

Section 133(6)Section 145(3)

However, the Ld. CIT(A) was of the view that the Assessing Officer should have estimated the Net Profit rate of 12% on the bogus purchases only and not on the entire turnover of the assessee. Accordingly, Ld. CIT(A) restricted the addition ... bogus purchases amounting to Rs. 23,48,12,550/- and excluded the Net Profit disclosed by the assessee). Accordingly, the assessee was allowed a relief of Rs. 77,10,277/-. 5. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(A). M/s. Anam Pesticides

SHI vs. Hankar Agarwal, Corporate Centre, A K Roadvs.Individual, Bkc, Bandra (East)

In the result, the appeal of the assessee is partly allowed

ITA 1838/MUM/2024[2009-10]Status: DisposedITAT Mumbai22 May 2025AY 2009-10

Bench: Shri Narender Kumar Choudhry & Shri Prabhash Shankar

For Appellant: Shri Ashok Bansal & Shri Ajay Daga, ARsFor Respondent: Shri Kiran Unavekar (Sr. DR)

Section 143(2)Section 143(3)Section 147Section 148

decision in the case of Pr. CIT vs. Mohammed Haji Adam & Co. 6. We find that based on the information of taking entries of bogus purchases bills, the AO found that purchases totalling to Rs.1,18,84,565/- from certain parties had confessed before the Sales tax Department that they ... concerned, the ld.CIT(A) observed that the only question now to be looked into is whether the additional GP ratio applied @12.50% on alleged bogus purchases is excess or not. Based on analysis of purchases reflected in copies of accounts of the alleged bogus suppliers in its own books

Chandra Kumar Jain, Damoh vs. Income Tax Officer, Damoh

In the result, the appeal of the assessee is dismissed

ITA 70/JAB/2024[2011-12]Status: DisposedITAT Jabalpur21 May 2025AY 2011-12

Bench: Sh. Kul Bharat & Sh. Nikhil Choudharya.Y. 2011-12 Chandra Kumar Jain, Vs. Nfac, Delhi, (Jurisdiction Prop. M/S Chandra & Sons, 14, 121 Officer, Ito, Damoh, M.P. Kirana Merchant, Bakoli Kirana Line, Damoh, M.P. Pan:Acjpj7460N (Appellant) (Respondent) Assessee By: Sh. Dhiraj Ghai, Fca Revenue By: Sh. Alok Bhura, Sr. Dr Date Of Hearing: 19.05.2025 Date Of Pronouncement: 21.05.2025 O R D E R Per Nikhil Choudhary, A.M. This Is An Appeal Filed By The Assessee Against The Order Of The Ld. Cit(A), Nfac Dated 29.12.2023 Under Section 250 Of The Income Tax Act, 1961 Dismissing The Appeal Of The Assessee Against The Order Of The Ito, Ward, Damoh Dated 12.12.2018. The Grounds Of Appeal Are As Under:- “1. On The Facts & Circumstances Of The Case, Ld. Cit(A) Erred In Confirming The Order Of Ld. Ao Being Based On Third Party'S Statements Without Allowing Their Cross Verification & Hence Addition Made Are Against Law & Natural Justice As Has Been Held In The Case Of C. Vasantlal & Co. V. Cit [1962] 45 Itr 206 By Supreme Court. Hence Additions Of Rs 4,65,700/-And Rs 10,525,/- May Kindly Be Deleted. 2. On The Facts & Circumstances Of The Case, Ld Cit (A) Erred In Confirming The Additions Made By Ao Of Rs. 4,76,225/-Without Considering The Fact That Bill Issued By M/S Narmada Sugar Pvt Ltd Narsinghpur.As Considered To Be That Of Assessee Was Not In Assessee Name & Hence Addition Was Based On Mere Assumptions & Presumptions.

For Appellant: Sh. Dhiraj Ghai, FCAFor Respondent: Sh. Alok Bhura, Sr. DR

Section 147Section 250Section 69

facts & circumstances of the case& law, Ld CIT (A) erred in confirming the addition of Rs. 4,76,225/- under section 69 towards 100% bogus purchase instead of restricting to profit element as held by Hon'ble Supreme Court in decision of N.Κ. Industries Ltd. 4. On the facts ... circumstances of the case, Ld CIT (A) erred in not considering the fact that AO failed to consider that neither banking transaction towards alleged bogus purchase was from the bank account of assessee nor the stock delivery place etc. of so called bogus purchases was in assessee premises and hence

Shri Kamlesh Deoraj Jain, Gandhidham Kutchh vs. The ITO Ward 1, Gandhidham

In the result, appeal filed by the assessee is allowed

ITA 62/RJT/2025[2018-19]Status: DisposedITAT Rajkot21 May 2025AY 2018-19

Bench: Dr. Arjun Lal Saini & Shri Dinesh Mohan Sinhaआयकर अपील सं./Ita No. 62/Rjt/2025 ("नधा"रण वष"/Assessment Year: (2018-19) Kamlesh Deoraj Jain Income Tax Officer, Ward-1, Plot No 35-36, Devashish Gandhidham, Income Tax Vs. Sector-5 Gandhidham 370201 Office, Plot No.32, Sector No.3, Near Iffco Colony, Gandhidham-370 201 "ायी लेखा सं./जीआइआरसं./Pan/Gir No.: Adopj1769Q (अपीलाथ"/Appellant) (""थ"/Respondent)

For Appellant: Shri Kalpesh Doshi, ARFor Respondent: Shri Sanjay Puglia, CIT-D.R

Section 144ASection 145(3)Section 147Section 148Section 250Section 68

Learned CIT (A) erred in law and facts in upholding the action of the Learned assessing officer in making addition u/s 68 as Bogus Purchase despite transactions with Ankur Chemfood Ltd were termed as Circular Transactions by Ld assessing officer himself and upholding the decision of assessing officer despite direct ... claim of purchases, the total purchase of Rs. 43,53,68,202/-, made by assessee, from M/s Ankur Chemfood Ltd. was treated as bogus purchase and books of accounts were rejected by the assessing officer u/s 145(3) of the Income Tax Act, 1961. Further, considering the judgment

Goel Pawan Kumar & Family (HUF), Sonipat vs. Income Tax Officer, New Delhi

In the result, the appeal of the assessee is partly allowed as indicated above

ITA 5252/DEL/2024[2012-13]Status: DisposedITAT Delhi21 May 2025AY 2012-13

Bench: Shris.Rifaur Rahman

For Appellant: Shri Roshan Kumar, AdvocateFor Respondent: Shri B.S. Anand, Sr. DR

Section 143Section 147Section 148

Shree Krishna Trading Co. in respect of the bills submitted by the assessee. Accordingly, Assessing Officer concluded the assessment by disallowing the entire bogus purchases of Rs.24,20,165/- - 3. Aggrieved with the above order, assessee preferred an appeal before the ld. CIT (A) who confirmed the addition made ... Assessing Officer (AO) in making an addition of Rs.24,20,165 creating tax demand of Rs.13,59,670/- on account of alleged bogus purchases without independent application of mind and by relying solely on the information received from the Investigation Wing without conducting further independent inquiries. The addition made

Income Tax Officer, Noida vs. Clean Crop India Private Limited, Noida

Appeal is dismissed

ITA 3236/DEL/2024[2022-23]Status: DisposedITAT Delhi21 May 2025AY 2022-23

Bench: Shri Satbeer Singh Godara & Shri Manish Agarwalassessment Year: 2022-23 Income Tax Officer, Vs. Clean Crop India Pvt. Ltd., Noida Flat No. 211, Bha Millennium Towers, Plot B- 9/17, Sector-62, Noida, Gautam Buddha Nagar, Uttar Pradesh Pan: Aaicc0064D (Appellant) (Respondent)

Section 133(6)Section 143(3)

Simit P. Seth (2013) 356 ITR 451 upheld the order of the Tribunal directing an addition to the extent of 12.5% of bogus purchases. 4.6.8 On perusal of trading and profit and loss account it is seen that the assessee has shown purchases of Rs.28,75,36,893/- and sale ... held that “from the order of the Tribunal dated 30-04-2010, we find that the Tribunal has deleted the additions on account of bogus purchases not only on the basis of stock statement i.e. reconciliation statement, but also in view of the other facts. The Tribunal records that

Mahabir Parshad Goel, Delhi vs. ITO Ward 47(1), New

In the result, the appeal of the assessee is partly allowed as indicated above

ITA 1403/DEL/2024[2012-13]Status: DisposedITAT Delhi21 May 2025AY 2012-13

Bench: Shris.Rifaur Rahmanmahabir Parshad Goel, Vs. Ito, Ward 47 (1), 4080-81, First Floor, Naya Bazar, New Delhi. Chandni Chowk, Delhi – 110 006. (Pan : Abhpg7332H) (Appellant) (Respondent) Assessee By : Shri Vasu Bansal, Ca Revenue By : Shri Sanjay Kumar, Sr. Dr Date Of Hearing : 13.03.2025 Date Of Order : 21.05.2025 O R D E R 1. The Assessee Has Filed This Appeal Against The Order Of The Learned Commissioner Of Income Tax (Appeals)/National Faceless Appeal Centre (Nfac), Delhi [“Ld. Cit(A)”, For Short] Dated 30.01.2024 For The Assessment Year 2012-13. 2. Brief Facts Of The Case Are, Assessee Filed Its Return Of Income Declaring Income Of Rs.4,85,670/- For Ay 2012-13 On 27.09.2012. Subsequently, Ao Received Information From Ddit (Inv.), Unit 6 (2) That Assessee Has Taken Accommodation Entry From Ashok Kumar Gupta, Sandeep Gupta & Anuj Gupta & They Have Accepted The Same On Oath In Statement

For Appellant: Shri Vasu Bansal, CAFor Respondent: Shri Sanjay Kumar, Sr. DR

Section 148

placed on record. I observed that based on the information received from Investigation Wing, the purchases declared by the assessee were found to be bogus purchases. 4 At the same time, I observed that assessee has already declared the sales and also recorded accommodation entries, the Assessing Officer has disallowed ... whole purchases as not proper. However, I observed that Hon’ble High Court has considered similar issues and they held that in case of bogus purchases, only certain percentages has to be sustained as income of the assessee considering the actual benefit earned by the assessee in such transactions