MANISH KHANDELWAL,NEW DELHI V. ITO, WARD-44(1), NEW DELHI

ITA 2995/DEL/2024

AI Insights

The case involves an appeal by Sh. Manish Khandelwal against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, which upheld the disallowance of his purchases amounting to Rs.1,17,87,527 as bogus under section 69C of the Income-tax Act, 1961. The Tribunal noted that while the assessee's business of trading in iron and steel could involve sourcing from unregistered dealers, the sales corresponding to these purchases were not questioned in the lower proceedings. The Tribunal considered various judicial precedents and decided to disallow a lumpsum of 6% on the disputed purchases, rejecting the assessee's book entries to that extent.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 832287 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: misc
• Appeal Filed On: 18-06-2024
• Other Referred Cases: Ravjibhai Becharbhai Dhamelia vs. ACIT, PCIT Vs. Hitesh Mody (HUF), PCIT Vs. Forum Sales (P) Ltd., PCIT Vs. Kanak Impex (India) Ltd, DCIT Vs. Kohinoor Foods Ltd., DCIT Vs. Tirupati Matsup (P.) Ltd.
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANKUSH KALRA
• Assessee Lawyers: V. K. SABHARWAL
• Keywords: Unexplained expenditure; Bogus purchase; Bogus
• Section: 147; 143(3); 69C

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘E’ NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER ITA No.2995/Del/2024 Assessment Year: 2011-12 Sh. Manish Khandelwal, H-249, Vikashpuri, New Delhi Vs. Income Tax Officer, Ward-44(1), New Delhi PAN: AGTPK1477G (Appellant) (Respondent) ORDER PER SATBEER SINGH GODARA, JM This assessee’s appeal for assessment year 2011-12, arises against the Commissioner of Income Tax (Appeals)/National Assessee by Sh. V.K. Sabharwal, Adv. Sh. Rajiv Kumar, Adv. Sh. J.L. Sethi, Adv. Department by Ms. Ankush Kalra, Sr. DR Date of hearing 22.01.2026 Date of pronouncement 22.01.2026 Printed from counselvise.com ITA No.2995/Del/2024 Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2024-25/1064209294(1), dated 19.04.2024 involving proceedings under section 147 r.w.s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Heard both the parties. Case file perused. 2. 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 his unexplained expenditure towards “purchases” of Rs.1,17,87,527/- in AY 2011- 12, sourced from various entities as bogus ones under section 69C of the Act, in the assessment order dated 22.12.2018, and upheld in the lower appellate discussion. 3. 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 engaged in trading of raw material i.e. iron 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 Printed from counselvise.com ITA No.2995/Del/2024 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. 4. Faced with these peculiar facts, it is thus deemed appropriate in the larger interest of justice that a lumpsum disallowance @ 6% of the assessee’s alleged bogus purchases amounting to Rs.1,17,87,527/-, 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. No other ground or argument has been pressed. Printed from counselvise.com ITA No.2995/Del/2024 5. This assessee’s appeal is partly allowed in above terms. Order pronounced in the open court on 22nd January, 2026 Sd/- Sd/- (AMITABH SHUKLA) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 22nd January, 2026. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi Printed from counselvise.com "