ITAT: Adopts Lump-Sum Disallowance for Bogus Purchases Where Sales are Accepted; Deletes Penalty.
Brief Facts of the Case
The assessee, Ankur Kumar Goel, filed two appeals for the Assessment Year 2012-13. The first appeal challenged the complete disallowance of purchases worth ₹34,54,339, which the lower authorities had treated as bogus. Notably, the sales figures corresponding to these purchases had been accepted by the tax authorities. The second appeal was against the penalty of ₹10,17,970 levied under Section 271(1)(c) of the Income-tax Act on the same addition.
Decision of the Tribunal
The ITAT partly allowed the appeal against the addition and fully allowed the appeal against the penalty.
- Bogus Purchases Addition (Quantum Appeal): The Tribunal acknowledged that while the assessee’s sales were not disputed, the genuineness of the purchases could not be proven. Instead of upholding the entire disallowance, the Tribunal, in the “larger interest of justice,” decided to restrict the addition to a lump sum of ₹3.5 lakhs.
- Penalty Appeal: The Tribunal deleted the penalty in its entirety. It reasoned that the quantum issue of bogus purchases requires a detailed appreciation of evidence9. Citing the Supreme Court’s judgment in CIT v. Reliance Petroproducts P. Ltd., the Tribunal held that such an issue does not automatically constitute “concealment of income or furnishing of inaccurate particulars thereof” Therefore, levying a penalty was not justified.
Case Citation
Ankur Kumar Goel vs. Income Tax Officer, Ward-44(6), Delhi.
- Appeal Number: ITA No. 2725 & 2726/Del/2025
- Date of Judgment: 6th October 2025
- Tribunal: Income Tax Appellate Tribunal, Delhi Bench ‘SMC’
Source :-Judgement