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Judgment
ORDER
PER SATBEER SINGH GODARA, JM
This assessee’s appeal for assessment year 2021-22, arises against the Commissioner of Income Tax (Appeals) [in short, the “CIT(A)”], Delhi’s-26 DIN and order no. ITBA/APL/S/250/2025-26/1083005524(1), dated 26.11.2025 involving proceedings under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).
It emerges during the course of hearing that the assessee presses for his sole substantive ground on merits challenging both the learned lower authorities’ action treating 8% of entire purchases of Rs.24,29,06,292/- in AY 2021-22, coming to Rs.1,94,32,503/- sourced from of various entities as bogus ones under section 69C of the Act, in the assessment order dated 28.12.2022, 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. We wish to make it clear that there is no dispute in principle that the assessee is an individual and working as a commission agent of all kinds of ferrous and non-ferrous metal scraps, mainly dealing in brass, copper, aluminum, zinc and steel all along wherein possibility of assessee sourcing its purchases from unregistered dealers per se could not be altogether ruled out as well. And that his corresponding sales have nowhere been questioned in both the lower proceedings. Various 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 @ 2.5% of the assessee’s alleged bogus purchases amounting to Rs. 24,29,06,292/-, would be just and proper with a rider that the same shall not be treated as a precedent. The assessee’s book entries are hereby rejected to the very extent. Necessary computation shall follow as per law.
This assessee’s appeal is partly allowed in above terms.