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“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

Jignesh Suresh Shah, Mumbai vs. Income Tax Department Income Tax Officer Ward, 1, Thane

ITA 5151/MUM/2024[2010-11]Status: DisposedITAT Mumbai21 Apr 2025AY 2010-11

Bench: Shri Narender Kumar Choudhry, Jm & Ms Padmavathy S, Am

For Appellant: Shri Krishna Kumar, Sr. DR
Section 148Section 271Section 271B

time and after perusing the details furnished the AO completed the assessment by making an addition of Rs. 3,07,56,388/- towards bogus purchases. The AO also initiated penalty proceeding under section 271B for failure to get account audited. 3. The AO subsequently issued a penalty notice under section

Harjinder Singh, Panipat vs. ITO, Ward-1, Panipat

In the result assessee’s appeal is allowed for statistical purposes

ITA 70/DEL/2025[2018-19]Status: DisposedITAT Delhi17 Apr 2025AY 2018-19

Bench: The Itat. The Assessee

Section 143(1)Section 144Section 144BSection 147Section 249(2)Section 249(3)

total income of Rs. 4,35,400/-, which was processed u/s 143(1) of the Act. Subsequently, on receipt of information that assessee had bogus purchases of Rs. 17,31,974/-, the case was reopened. In reassessment proceedings the AO completed the assessment u/s 147 read with section 144 read ... section 144B of the Act at an income of Rs. 21,67,374/- by adding Rs. 17,31,974/- on account of disallowance of bogus purchases to the income returned by the assessee. 4. Aggrieved by the same the assessee preferred appeal before

Income Tax Officer Ward 3(1), Ludhiana vs. Gaurav Kumar, Ludhiana

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

ITA 412/CHANDI/2024[2017-18]Status: DisposedITAT Chandigarh16 Apr 2025AY 2017-18

Bench: SHRI. LALIET KUMAR (Judicial Member), SHRI. KRINWANT SAHAY (Accountant Member)

For Appellant: Shri Sudhir Sehgal, AdvocateFor Respondent: Shri Vivek Vardhan, Addl. CIT
Section 115BSection 133(6)Section 145(3)Section 69

Income Tax Act, 1961 from Sundry Creditors and the Creditors denied to have any transaction with assessee. Thus, the AO confirmed the bogus purchases made by the assessee amounting to Rs. 2,35,16,883/-. 3. That the Ld. CIT(A) has erred in not appreciating the facts that ... erred in not appreciating the fact that books of accounts were rejected u/s 145(3) of the Act., as the AO confirmed the bogus purchases after denying the purchases by creditors. 5. That the Appellant craves, leave for permission to add, amend, or alter any ground of appeal

Income Tax Officer-1(2)(1), Mumbai vs. Lube Distributing Company Pvt. Ltd, Mumbai

In the result, the appeal by the Revenue and the application by the assessee under Rule 27 of the ITAT Rules, 1963 are dismissed

ITA 3405/MUM/2024[2015]Status: DisposedITAT Mumbai16 Apr 2025

Bench: Shri Narendra Kumar Billaiyashri Sandeep Singh Karhailincome Tax Officer-1(2)(1), Room No.536, 5Th Floor, Aayakar Bhawan, M.K. Road, Mumbai - 400020 ............... Appellant

For Appellant: Shri Devendra JainFor Respondent: Shri Ram Krishn Kedia, Sr.DR
Section 132Section 144BSection 147Section 148Section 250

wherein it was found that they have controlled over several entities which were used for providing bogus bills to beneficiaries in the form of bogus purchases, services, sales, etc. and the assessee is one such beneficiary, who has obtained accommodation entries of Rs.71,91,040/- during the year under consideration

Pushpa Saluja vs. ITO Ward 45(4) New Delhi

ITA/281/2024HC Delhi15 Apr 2025

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

Section 131Section 142(1)Section 143(2)Section 260ASection 68

this court: “(i) Whether the Ld. ITAT erred in upholding the wrongful application of Section 68 of the Income Tax Act, 1961 on alleged bogus purchases? (ii) Whether the Ld. ITAT erred in upholding addition of entire amount of the alleged bogus purchases to the income of the Appellant, instead ... concluding that increase in the sundry creditors, as reflected in the balance sheet, to the extent of ₹55,54,377/- was on account of bogus purchases. The tabular statement indicating the sundry creditors and the amounts outstanding which were considered as bogus is set out below: “S.No. Sundry Creditors

Vinay Bansal, Ghaziabad vs. CIT(A), Delhi

ITA 6104/DEL/2024[2018-19]Status: DisposedITAT Delhi15 Apr 2025AY 2018-19

Bench: Shri Mahavir Singh, Hon’Bleasstt. Year : 2018-19 Vinay Bansal, Vs. Assessment Unit, L-258, Sector-12, Income Tax Department, Pratap Vihar, Delhi/Cit(A), Delhi Ghaziabad (Pan: Alxpk7996D) (Appellant) (Respondent) Appellant By : Shri Vipin Kumar, Ca Respondent By : Shri Sanjay Kumar, Sr. Dr. Date Of Hearing 15.04.2025 Date Of Pronouncement 15.04.2025 Order

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

during the year. He further submitted that Ld. CIT(A) is not justified in treating purchase from Raj Trading Company as bogus purchase of Rs. 35,68,523/- and affirmed the action of the AO in treating the said purchases as bogus. He submitted that there are various ... High Court decisions wherein, it has been held that no adhoc addition of bogus purchases should be made, but however, he has requested to restrict the addition to some reasonable percentage. Ld. DR relied upon the orders of the authorities below. 5. I have heard both the parties and perused

Wani Iron Steel, Srinagar vs. Ward 1 Srinagar, Srinagar

In the result the appeal of the assessee is allowed for statistical purpose

ITA 462/ASR/2024[2016-17]Status: DisposedITAT Amritsar11 Apr 2025AY 2016-17

Bench: Sh. Udayan Dasgupta & Sh. Krinwant Sahay(Hybrid Hearing) I.T.A. No.462/Asr/2024 Assessment Year: 2016-17

Section 133(6)Section 147Section 148Section 69C

restricted the said disallowance to 10% (ten percentage) of the disputed purchases, considering the fact that the corresponding sales against such alleged bogus purchases has not been doubted and as such only a reasonable disallowance is called for. 4. Before the tribunal the Ld. AR of the assessee filed ... jurisdictional AO to accept the fresh documentary evidences and cause necessary verification as per provisions of law for fresh adjudication relating to the alleged bogus purchase and to pass appropriate orders. 8. The assessee shall be allowed reasonable opportunity of being heard. In the result the appeal of the assessee

Income Tax Officer Ward-1 Srinagar, Srinagar vs. Wani Iron Steel, Nowgam by Pass

In the result the appeal of the assessee is allowed for statistical purpose

ITA 442/ASR/2024[2016-17]Status: DisposedITAT Amritsar11 Apr 2025AY 2016-17

Bench: Sh. Udayan Dasgupta & Sh. Krinwant Sahay(Hybrid Hearing) I.T.A. No.462/Asr/2024 Assessment Year: 2016-17

Section 133(6)Section 147Section 148Section 69C

restricted the said disallowance to 10% (ten percentage) of the disputed purchases, considering the fact that the corresponding sales against such alleged bogus purchases has not been doubted and as such only a reasonable disallowance is called for. 4. Before the tribunal the Ld. AR of the assessee filed ... jurisdictional AO to accept the fresh documentary evidences and cause necessary verification as per provisions of law for fresh adjudication relating to the alleged bogus purchase and to pass appropriate orders. 8. The assessee shall be allowed reasonable opportunity of being heard. In the result the appeal of the assessee

Anil Kumar Mittal, Delhi vs. ITO, Ward 58(7), Delhi

In the result, impugned order is set aside and appeal of the assessee is allowed

ITA 5298/DEL/2024[2018-19]Status: DisposedITAT Delhi09 Apr 2025AY 2018-19

Bench: Shri Vikas Awasthyआअसं.5298/िद"ी/2024 (िन.व. 2018-19) Anil Kumar Mittal, 458-466, Shambhu Nath Compound, Gali No. 8, Friends Colony, Industrial Area, G.T Road, Shahadra, Delhi 110095 ...... अपीलाथ"/Appellant Pan: Addpm-5324-M बनाम Vs. Income Tax Officer, Ward 58(7), Vikas Bhawan, I.P Estate, ..... "ितवादी/Respondent New Delhi 110002 अपीलाथ" "ारा/ Appellant By : Shri D.K. Anand, Chartered Accountant "ितवादी"ारा/Respondent By : Shri Sanjay Kumar, Sr. Dr सुनवाई क" ितिथ/ Date Of Hearing : 13/01/2025 घोषणा क" ितिथ/ Date Of Pronouncement : : 09/04/2025 आदेश/Order Per Vikas Awasthy, Jm: This Appeal By The Assessee Is Directed Against The Order Of Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (Hereinafter Referred To As 'The Cit(A)') Dated 06.09.2024, For Assessment Year 2018-19. 2. The Assessee In Appeal Has Raised Three Grounds Assailing Addition On Merits As Well As Assailing Validity Of Assessment Order U/S.147 R.W.S. 144B Of The Income Tax Act,1961(Hereinafter Referred To As ‘The Act’).

For Appellant: Shri D.K. Anand, Chartered AccountantFor Respondent: Shri Sanjay Kumar, Sr. DR
Section 147Section 148

appeal are taken up together as they relate to single issue i.e. addition of Rs.14,83,879/- on account of bogus purchases. The ld. AR of the assessee submits that the assessee is engaged in the business of manufacturing cooper wire under the sole proprietorship business in the name ... company and not a paper company as alleged by the Department. The AO made addition of Rs.14,83,879/- on account of alleged 3 bogus purchases made by the assessee from M/s. RCI Industries and Technologies Ltd. Aggrieved by the assessment order dated 23.03.2023 passed u/s. 147 r.w.s 144B

Income Tax Officer Ward-2(1), Faridabad vs. Prahlad, Palwal

In the result, the Revenue’s appeal is partly allowed as above

ITA 42/DEL/2024[2020-21]Status: DisposedITAT Delhi09 Apr 2025AY 2020-21

Bench: Shri Vikas Awasthy & Shri Avdhesh Kumar Mishra

Section 145(3)Section 146(3)Section 40Section 40A(3)

books of accounts of the assessee. 5.2 The Ld. Sr. DR contended that the AO had made specific additions/ disallowances on accounts of bogus purchases, disallowances under section 40(a)(ia) and 40A(3) of the Act. The Ld. Sr. DR, quoting the provisions of Section ... contended that the Ld. CIT(A) had not reversed the finding of the AO as far as non-rejection of books of accounts and bogus purchases were concerned. She therefore, prayed for setting aside of the impugned order and restoring of the assessment order. She submitted that there was huge

Scb Steel (P) Ltd. (Formerly Cbs Energy Systems Pvt. Ltd.), New Delhi vs. ACIT, Circle-5(2), New Delhi

ITA 8001/DEL/2019[2014-15]Status: DisposedITAT Delhi09 Apr 2025AY 2014-15

Bench: Shri Anubhav Sharma & Shri Manish Agarwalassessment Year: 2014-15 Scb Steel (P) Ltd. Vs Acit, (Formerly Cbs Energy Systems Circle-5(2), Pvt. Ltd.), New Delhi. S.B. Garg & Co.,Cas, 20/17, Shakti Nagar, New Delhi – 110 007. Pan: Aadcc2468C (Appellant) (Respondent) Assessee By : None Revenue By : Shri Sahil Kumar Bansal, Sr. Dr Date Of Hearing : 06.02.2025 Date Of Pronouncement : 09.04.2025 Order Per Anubhav Sharma, Jm: This Appeal Is Preferred By The Assessee Against The Order Dated 26.07.2019 Of The Commissioner Of Income-Tax (Appeals)-2, New Delhi (Hereinafter Referred To As The Ld. First Appellate Authority Or ‘The Ld. Faa’ For Short) In Appeal No.10678/16-17 Arising Out Of The Appeal Before It Against The Order Dated 28.12.2016 Passed U/S 143(3) Of The Income Tax Act, 1961 (Hereinafter Referred As ‘The Act’) By The Acit, Circle 5(2), New Delhi (Hereinafter Referred To As The Ld. Ao).

For Appellant: NoneFor Respondent: Shri Sahil Kumar Bansal, Sr. DR
Section 143(3)

through the material before us, we find that the return of the assessee was picked up for scrutiny assessment and addition on account of bogus purchase, 26AS mismatch and disallowance on account of non-deduction of TDS were made which have been upheld by the ld.CIT(A) for which ... into consideration the findings of ld.CIT(A), qua the grounds as raised, we find that with regard to the addition made on account of bogus purchases, the issue has been restored to the files of AO on the basis of defect in methodology of estimation of profit. Thus, the ground

Income Tax Officer, Ward-3(3)(1), Surat vs. Borda Brothers, Surat

In the result, both the appeals filed by the Department are dismissed

ITA 1068/SRT/2024[2007-08]Status: DisposedITAT Surat08 Apr 2025AY 2007-08

Bench: Shri Siddhartha Nautiyal & Shri Bijayananda Pruseth

For Appellant: None for AssesseeFor Respondent: Shri Ravi Kant Gupta, CIT DR
Section 148Section 271(1)(c)Section 69A

circumstances of the case and law the ld.CIT(A) has erred in deleting the addition of Rs.9,64,13.991/- made on account of bogus purchases u/s 69A of the Act ignoring the fact that these purchases are sham transactions fabricated through bogus paper concerns of Shri Rajendra Jain Group entities ... justified partly allowing the appeal of the assessee and restricting the addition to 6% of the Loud bogus purchases against the addition made by the AO at the rate of 100% of bogus purchases amounting 10 Rs. 9,64,13,991/- ignoring the fact that these purchases are sham transactions

Income Tax Officer, Surat vs. Borda Brothers, Varachha Road, Surat

In the result, both the appeals filed by the Department are dismissed

ITA 1062/SRT/2024[2007-08]Status: DisposedITAT Surat08 Apr 2025AY 2007-08

Bench: Shri Siddhartha Nautiyal & Shri Bijayananda Pruseth

For Appellant: None for AssesseeFor Respondent: Shri Ravi Kant Gupta, CIT DR
Section 148Section 271(1)(c)Section 69A

circumstances of the case and law the ld.CIT(A) has erred in deleting the addition of Rs.9,64,13.991/- made on account of bogus purchases u/s 69A of the Act ignoring the fact that these purchases are sham transactions fabricated through bogus paper concerns of Shri Rajendra Jain Group entities ... justified partly allowing the appeal of the assessee and restricting the addition to 6% of the Loud bogus purchases against the addition made by the AO at the rate of 100% of bogus purchases amounting 10 Rs. 9,64,13,991/- ignoring the fact that these purchases are sham transactions

Uniquestar Gems (India) Pvt. Ltd., Mumbai vs. The ITO, Ward 13(2)(1), Mumbai.

In the result the appeal filed by the assessee for A

ITA 1036/MUM/2025[2013-14]Status: DisposedITAT Mumbai08 Apr 2025AY 2013-14

Bench: Smt. Beena Pillai () & Shri Renu Jauhri ()

Section 148Section 148ASection 68

without further verification, 3. The assessee has submitted the corresponding sales against the alleged purchases. The Ld. AO has erred in making additions for bogus purchases but treated sales as genuine and Ld. CIT(A) has confirmed it. 4. The Ld. AO and Ld. CIT(A) has erred

Uniquestar Gems (India) Pvt. Ltd., Mumbai vs. The ITO, Ward 13(2)(1), Mumbai.

In the result the appeal filed by the assessee for A

ITA 1035/MUM/2025[2012-13]Status: DisposedITAT Mumbai08 Apr 2025AY 2012-13

Bench: Smt. Beena Pillai () & Shri Renu Jauhri ()

Section 148Section 148ASection 68

without further verification, 3. The assessee has submitted the corresponding sales against the alleged purchases. The Ld. AO has erred in making additions for bogus purchases but treated sales as genuine and Ld. CIT(A) has confirmed it. 4. The Ld. AO and Ld. CIT(A) has erred

Anurag Enterprises, Mumbai vs. ITO, Ward 19(1)(1), Mumbai

ITA 6791/MUM/2024[2017-18]Status: DisposedITAT Mumbai08 Apr 2025AY 2017-18

Bench: Shri Narender Kumar Choudhry (Jm) & Shri Omkareshwar Chidara (Am) Anurag Enterprises Ito Ward 19(1)(1) Je 4200, Bharat Diamond Room No. 223 Bourse, Bandra Kurla Vs. 2Nd Floor, Matru Complex, Bandra East Mandir, Tardeo Road Mumbai-400 051. Mumbai-400007. Pan : Aaafa3005B Appellant Respondent

For Appellant: Shri Rakeshkumar SirsalewalaFor Respondent: Shri Manoj Kumar Sinha
Section 69C

ITAT with the following grounds of appeal :- “Ground No. 1 - Addition for unexplained expenditure u/s 69C of the Income tax Act, 1961 as bogus purchases On the facts and in the circumstances of the case, and in law, the Hon'ble CIT (A) has erred in upholding the addition ... lakhs as bogus purchases without appreciating the facts and evidences brought on record. Your appellant is Partnership Firm and engaged in the business of trading of diamonds and manufacturing of jewellery and related business activities. During the course of the assessment proceedings, the Appellant had submitted all details and documents

Prakash R Mehta (HUF), Mumbai vs. Income Tax Officer Ward -19(2)(5), Mumbai

In the result the appeal filed by the assessee stands partly allowed

ITA 3969/MUM/2024[2012-13]Status: DisposedITAT Mumbai08 Apr 2025AY 2012-13

Bench: Smt. Beena Pillai () & Shri Girish Agrawal ()

Section 133(6)Section 142(1)Section 143(1)Section 148Section 69A

Gautam jain and group has said on oath that they have been using benami concerns to give accommodation entries in the nature of bogus purchase and bogus unsecured loans to various beneficiaries. It is also established fact that M/s Manirattnam Exim Pvt. Ltd. is a benami concern of Gautam Jain ... stock remains, however physically there is no stock. Thereafter, nan-genuine sales are shown by these concerns to interested parties, who want to book bogus purchases from time to time. Receipts are by the mode of cheque or RTGS. Upon receipt of which the concerns which had actually imported

DCIT, Central Circle - 7(1), Mumbai vs. Rakesh Natwarlal Patel, Thane

In the result, ITA No. 2813/Mum/2024 filed by the assessee is partly allowed, ITA No

ITA 3059/MUM/2024[2017-18]Status: DisposedITAT Mumbai07 Apr 2025AY 2017-18

Bench: Shri. Saktijit Dey, Hon’Ble & Shri. Girish Agrawalassessment Year: 2017-18

For Appellant: Shri Anadi Varma and Ms. Komal TrivediFor Respondent: Smt. Sanyogita Nagpal, CIT DR
Section 143(3)Section 144Section 147Section 69A

books of accounts. 4. Under the facts and in law, learned CIT(A) erred in alleging that the appellant is engaged in carrying out bogus purchase and sale transaction and would be getting 1% commission on such transactions. 5. Without prejudice to above grounds which overlap each other, the same ... against assessment order. 2.3 Under the facts and in law, learned CIT(A) erred in alleging that the appellant is engaged in carrying out bogus purchase and sale transaction and would be getting 1% commission on such transactions while deciding the appeal against assessment order. 3. Without prejudice to above

Rakesh Natwarlal Patel, Thane vs. Assistant Commissioner of Income Tax, Central Circle - 7(1), Mumbai

In the result, ITA No. 2813/Mum/2024 filed by the assessee is partly allowed, ITA No

ITA 2814/MUM/2024[2017-18]Status: DisposedITAT Mumbai07 Apr 2025AY 2017-18

Bench: Shri. Saktijit Dey, Hon’Ble & Shri. Girish Agrawalassessment Year: 2017-18

For Appellant: Shri Anadi Varma and Ms. Komal TrivediFor Respondent: Smt. Sanyogita Nagpal, CIT DR
Section 143(3)Section 144Section 147Section 69A

books of accounts. 4. Under the facts and in law, learned CIT(A) erred in alleging that the appellant is engaged in carrying out bogus purchase and sale transaction and would be getting 1% commission on such transactions. 5. Without prejudice to above grounds which overlap each other, the same ... against assessment order. 2.3 Under the facts and in law, learned CIT(A) erred in alleging that the appellant is engaged in carrying out bogus purchase and sale transaction and would be getting 1% commission on such transactions while deciding the appeal against assessment order. 3. Without prejudice to above

Rakesh Natwarlal Patel, Thane vs. Income Tax Officer, Ward 23(3)(5), Mumbai

In the result, ITA No. 2813/Mum/2024 filed by the assessee is partly allowed, ITA No

ITA 2813/MUM/2024[2017-18]Status: DisposedITAT Mumbai07 Apr 2025AY 2017-18

Bench: Shri. Saktijit Dey, Hon’Ble & Shri. Girish Agrawalassessment Year: 2017-18

For Appellant: Shri Anadi Varma and Ms. Komal TrivediFor Respondent: Smt. Sanyogita Nagpal, CIT DR
Section 143(3)Section 144Section 147Section 69A

books of accounts. 4. Under the facts and in law, learned CIT(A) erred in alleging that the appellant is engaged in carrying out bogus purchase and sale transaction and would be getting 1% commission on such transactions. 5. Without prejudice to above grounds which overlap each other, the same ... against assessment order. 2.3 Under the facts and in law, learned CIT(A) erred in alleging that the appellant is engaged in carrying out bogus purchase and sale transaction and would be getting 1% commission on such transactions while deciding the appeal against assessment order. 3. Without prejudice to above