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Judgment
These assessee’s appeals for assessment years 2018-19 and 2019-20, arise against the Commissioner of Income Tax (Appeals)/NFAC [in short, the “CIT(A)”], New Delhi’s DIN and order nos. ITBA/NFAC/S/250/2025-26/1084536724(1) and ITBA/NFAC/S/250/2025-26/1084537184(1), dated 07.01.2026 involving proceedings under section 147 r.w.s. 144B of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).
Heard both the parties at length. Case file perused.
It emerges during the course of hearing that the assessee raises his sole substantive ground challenging both the learned lower authorities’ action treating his purchases amounting to Rs.25,29,296/- in AY 2018-19 and Rs.8,25,988/- in AY 2019-20 sourced from Shri Daya Shankar, Prop. Of M/s Bhagwati Enterprises, as bogus purchases under section 69C of the Act, in assessment orders dated 21.03.2023 and 30.03.2025 for AY 2018-19 and 2019-20, respectively, as upheld in the lower appellate discussion.
That being the case, both the parties vehemently reiterate their respective stands against and in support of the impugned bogus purchases disallowance. I wish to make it clear that there is no dispute in principle possibility of some cash turnover could not be altogether ruled out. And that his corresponding sales have nowhere been questioned in both the lower proceedings. 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. 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.
Faced with these peculiar facts, it is thus deemed appropriate in the larger interest of justice that a lumpsum disallowance @ 5% of the assessee’s alleged bogus purchases amounting to Rs.25,29,296/- in AY 2018-19 and Rs.8,25,988/-in AY 2019-20 would be just and proper with a rider that the same shall not be treated as a precedent. Necessary computations shall follow as per law.
No other ground or argument has been pressed.
These assessee’s twin appeals ITA No.1682 & 1683/Del/2026 are partly allowed in above terms. A copy of this common order be placed in the respective case files.