IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “B” BENCH: NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER &

SHRI MANISH AGARWAL, ACCOUNTANT MEMBER [Assessment Year : 2021-22]

Nitin Mangla vs PCIT-15 D-15, Ground Floor, Delhi Vikaspuri, New Delhi-

110018.

PAN-AJBPM5834C APPELLANT RESPONDENT Appellant by Shri Shantanu Kanungo, Adv.

& Ms. Sayantani Kanungo, Adv.

Respondent by Ms. Pooja Swaroop, CIT DR Date of Hearing 22.01.2026 Date of Pronouncement 10.04.2026

ORDER

PER MANISH AGARWAL, AM :

The present appeal is filed by assessee against the order dated

27.03.2025 by Ld. Pr. Commissioner of Income Tax, Delhi-5 [“Ld. Pr. CIT”] passed u/s 263 of the Income Tax Act, 1961 [“the Act”]

pertaining to Assessment Year 2021-22.

2. Brief facts of the case are that assessee has e-filed his return of income on 01.01.2022, declaring total income at INR 14,38,120/-. The case of the assessee was selected under CASS for complete scrutiny for the reason that assessee has made substantial purchase from buyers where either non-suppliers or non-filer(s) of ITR.

Accordingly, notice u/s 143(2) followed by notices u/s 142(1) were issued alongwith questionnaires from time to time. The AO at page 2 of the assessment order observed that except one reply dated 13.10.2022, no notice was complied with by the assessee. Therefore, the AO issued summons u/s 133(6) of the Act to the respective supplier parties. The AO also obtained information from GST portal and it was observed that out of 08 parties who have not filed their ITRs for the year under appeal, in reply to notice issued u/s 133(6) of the Act, three parties have filed the details however, the notice in case of remaining five parties remained un-complied therefore, the AO hold the total purchase made from these Five parties at INR 10,47,03,730/- as not genuine and bogus and by following the judgment of Hon’ble Gujarat High Court in the case of CIT vs Simit P Sheth reported in 356 ITR 451 (Guj. HC) made the addition @ 12.5% of total purchases held as bogus and made the addition of INR 1,30,87,966/- u/s 69C of the Act. The total income of the assessee thus, was computed at INR 1,45,26,090/-. Thereafter, Ld. PCIT initiated the revision proceedings u/s 263 of the Act by issue of show cause notice dated 03.03.2025 wherein Ld. PCIT observed that once the assessee has failed to substantiate the purchases made from Five parties, the AO should have made the disallowance of the entire purchase as against the disallowance made @ 12.5% of such purchase and therefore, the assessment is erroneous and pre-judicial to the interest of the Revenue. In response, assessee filed purchase invoices, copies of accounts, e-way bills, GR etc. and further filed copy of the bank statements however, Ld. PCIT observed that assessee has not filed stock register and confirmation of the parties therefore, the purchases remained unverified. Ld. PCIT thus, observed that AO should have made the disallowance of the entire purchases and accordingly, held the assessment order as erroneous and pre-judicial to the interest of the Revenue and enhanced the income of the assessee by INR 9,16,15,764/- u/s 69C of the Act r.w.s.

115BBE of the Act.

3. Against the said order, the assessee is in appeal before the Tribunal wherein various Grounds of appeal taken by the assessee as per the appeal memo.

4. Since all the Grounds of appeal taken by the assessee are with respect to the action of Ld. PCIT in making the addition on account of entire purchases held as bogus after holding the assessment order as erroneous and pre-judicial to the interest of the Revenue u/s 263 of the Act therefore, they are taken together for consideration.

5. Before us, Ld.AR submits that case of the assessee was selected for scrutiny for the reason that a search action was carried out u/s 132 of the Act on M/s. Johnson Watch Group where GST data indicated that assessee firm M/s. Kesho Ram Mangla Oil Exports had appeared in connection with alleged accommodation entry transactions. Thereaf