An addition for bogus purchases cannot be sustained solely on third-party information without verification of the assessee's corroborative evidence; disallowance should be restricted to the profit element and not the full purchase amount where business nexus is established.

आदेश / ORDER

PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:

This appeal is filed by the Revenue against the order of CIT(A)/National Faceless Appeal Centre Delhi vide DIN: ITBA/NFAC/S/250/2025-26/1076249118(1) dated 16.05.2025 passed against the assessment order by Income Tax Officer – 15(2)(2), Mumbai u/s 143(3) of the Income-tax Act (hereinafter referred to as the “Act”), dated 28.03.2013 for the Assessment Year 2010-11.

Revenue has raised the following grounds of appeal:

1) "Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting entire addition amount of Rs.4,21,60,977/- made by the AO on account of the bogus purchases, from 11 hawala parties?"

2) "Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting entire addition amount of Rs. 4,21,60,977/- made by the AO on account of the bogus purchases, from 11 hawala parties, by ignoring the fact that action of the AO was based on the examination and verification of explanation along with evidences such as purchase bills, delivery challans etc., the AO concluded that purchases from said 11 entities to be treated as bogus purchases as the assessee failed to establish identity and genuineness of parties and completed assessment proceedings u/s 143(3) of the Act."

3) "Whether on the facts and circumstances of the case and in law, Ld. CIT(A) has erred in deleting entire addition amount of Rs. 4,21,60,977/- made by the AO on account of the bogus purchases, from 11 hawala parties, by ignoring the fact that during the assessment Proceedings, the assessee could neither produce the quantity tally of day to day purchase bills, Stocks, Delivery Challans and corresponding values nor could produce the parties for verification, in spite of opportunity provided by the Assessing Officer?"

4) "Whether on the facts and circumstances of the case and in law, Ld. CIT(A) has erred in deleting entire addition amount of Rs. 4,21,60,977/- made by the AO on account of the bogus purchases, from 11 hawala parties, by ignoring the fact that the assessee has availed accommodation entries from hawala traders and failed to prove the genuineness of the alleged transactions as well as creditworthiness of the parties from whom the alleged purchases were purportedly made?"

5) "Whether on the facts and circumstances of the case and in law, Ld CIT(A) has erred in deleting entire addition amount of Rs. 4,21,60,977/- made by the AO on account of the bogus purchases, from 11 hawala parties, without appreciating the decision of the Hon'ble Supreme Court in the case of M/s. N. K. Proteins Ltd. Vs. Dy. CIT (2016) 292 CTR (Gul) 354, Dated. 16.01.2017, wherein the Hon'ble Court has held that when the purchases mode are from bogus suppliers or concerns, the entire purchases are liable to disallowed?"

6) "Whether on the facts and circumstances of the case and in law, Ld CIT(A) has erred in deleting entire addition amount of Rs. 4,21,60,977/- made by the AO on account of the bogus purchases, from 11 hawala parties, without appreciating the decision of the Hon'ble Supreme Court in the case of M/s. N. K. Proteins Ltd. Vs. Dy. CIT (2016) 292 CTR (Gul) 354, Dated. 16.01.2017, wherein the Hon'ble Court has held that when the purchases mode are from bogus suppliers or concerns, the entire purchases are liable to disallowed?"

7) "Whether on the facts and circumstances of the case and in law, Ld. CIT(A) has erred in deleting entire addition amount of Rs. 4,21,60,977/- made by the AO on account of the bogus purchases, from 11 hawala parties, without appr