IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘C’: NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER&

SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER [Assessment Year:2021-22]

Income Tax Officer, Rohtak, Vijender Goyal, Ayakar Bhawan, Room No.7, H. No.8, Kh. No.767, Swaran Opp. Mansorver Park, Vs Park, Mundka, Delhi-110041 Haryana-124001 PAN AIGPG3240a Appellant Respondent Revenue by Shri Mukesh Kumar Jha, CIT(DR)

Assessee by Shri Ved Jain, Adv. &

Shri Pawan Garg, CA Date of Hearing 16.12.2025 Date of Pronouncement 25.02.2026

ORDER

PER AMITABH SHUKLA, AM, The captioned appeal has been preferred by theRevenue againstorder dated 02.08.2024 of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, New Delhi, [hereinafter referred to as ‘ld. CIT(A)’] arising out of assessment order dated 26.12.2022 passed u/s 143(3)r.w.s. 144B of the Income Tax Act, 1961 pertaining to Assessment Year 2021-22. The word ‘Act’ herein this order would mean Income Tax Act, 1961.

2. The Revenue has raised following grounds of appeal:-

1. Whether on the facts and the circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the addition of Rs.9,11,40,892 as bogus purchases u/s 37(1) of the Income Tax 1961 as the assessee has not furnished any documentary evidence in respect of business activities carried out by the parties (seller) during the relevant year ?"

2. Whether on the facts and the circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the addition of Rs.89,14,186/- on account of disallowance of sundry creditors u/s 68 of the Income Tax Act, 1961" as the assessee had failed to furnish the copy of account & confirmation of the said transaction during the assessment proceedings inspite of providing sufficient opportunity by issuing notices u/s 142(1)/show cause notice.

3. The first issue raised by the Revenue is regarding the action of ld. CIT(A) in deleting an addition of Rs.9,11,40,892/- made by the ld. AO as bogus purchases under section 37(1) of the Act. We have heard rival submission on the matter in the light of material available on records. The appellant Revenue hold the view that the assessee did not submit requisite documentary evidences qua business activities carried out by the sellers to the AO. The assessee is reportedly engaged in the business of scrap trading. The arguments raised by the rival parties have been heard and considered. The ld. Counsel for the assessee has argued that there is no merit in the ground raised by the assessee qua non-submissions of details since the AO in the assessment order has itself confirmed that the assessee has submitted necessary details on the matter. We have also noted the discussion of ld. CIT(A) contained in para-12.1 to 12.5 of his order on pages 27 to 29. For the purposes of clarity the same are extracted hereunder:-

“12.1 On going through the observations of the assessing officer as given in the assessment order it is seen that the assessing officer has treated an amount of Rs. 9,11,40,892/- as bogus purchases for the reasons given by him in para 4 of the assessment order which reads as under:

"1. Thus, in view of the above it is pertinent to mention here that it is Suo- Moto Cancellation of registration initiated by the Tax Official for various default as per the provisions of GST Law. However, the assessee did not furnish any clarification in this regard.

2. It is also to be noted that the above third parties have mostly started business only during the FY 2020-21, i.e. relevant to AY 2021- 22, filed GST returns for a small period i.e. for the F.Y. 2020-21. Further it is noticed that the co-called suppliers did not file GST return for the F.Y. 2019-20 and for the F.Y. 2021-22 regularly.

3. There is no record of business before F.Y. 2020-21. The business is in the name of individual who never indulged in any business activities, but suddenly has business activities with transactions running into lakhs of rupees and did not file return of income in spi