Bogus Purchases from Five Hawala Suppliers: ITAT Delhi Restricts Profit Estimation to 8%

Suraj Narang Vs Assessing Officer (ITAT Delhi) Assessee, Suraj Narang (HUF), engaged in yarn trading under the name “Love Kush Yarn”, filed return for AY 2018-19 declaring ₹7,11,350. Based on departmental information, AO reopened assessment u/s 147 on 29.03.2022 alleging that Assessee had made bogus purchases of ₹4,65,88,878 from five hawala entities—Shree Balaji Wooltex, Radha Kanheya Export, Sri Rameshwaram International, Soni Textiles & Shree Bankey Bihari Enterprises. Assessee did not file return in response to 148, nor comply with repeated 142(1) notices. AO rejected books u...