M/s. Grover Light Source Pvt. Ltd. vs Income Tax Officer, Ward-1(1)(3)

This assessee’s appeal for assessment year 2018-19, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2025-26/1086139210(1), dated 17.02.2026 involving proceedings under section 147 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).

Heard both the parties. Case file perused.

It emerges during the course of hearing with the able assistances coming from both the parties that the learned lower authorities have treated the assessee’s sales as well purchases involving M/s. RCI Industries and Technologies Ltd. amounting to Rs.11,01,175/- and Rs.7,85,091/- as bogus ones since representing mere accommodation entries.

The Revenue vehemently argues that the tribunal ought to uphold the same given the fact that the aforesaid entity has been found to be an accommodation entry provider of both sales and purchases to various parties including the assessee.

That being the case, this tribunal hardly finds any reason to accept the Revenue’s stand in entirety. It is made clear that once the assessee’s both purchases and sales have been treated as accommodation entries, it is not the entire sum but only the alleged commission element component therein which deserves to be assessed. The learned Assessing Officer is accordingly directed to assess the sum total of the assesee’s both alleged purchases as well as sales to that @ 1% only or the GP component whatever declared at its behest all along in the books of account; whichever is higher. Necessary computation shall follow as per law.

It is further made clear that the instant estimation of assessee’s both purchases as well sales shall not be treated as a precent.

This assessee’s appeal is partly allowed.