What did the Tribunal hold?

The Tribunal acknowledged that purchases were not entirely bogus but lacked proper documentation. While upholding that a profit element was embedded, it reduced the estimated profit rate from 12.5% to 6.5% on the disputed purchases.

The assessee declared a total income of Rs. 13,02,780/-. The Assessing Officer initiated reassessment proceedings based on information of bogus GST invoices and added 12.5% profit on purchases from a specific company, amounting to Rs. 11,17,500/-. The CIT(A) upheld this addition.

What were the issues?

Whether the addition of profit on purchases made without proper documentation, based on an estimation, is justified and at what rate.

Ashim Kumar Modi, Howrah vs DCIT | s.250 | ITAT Kolkata 2026

Income Tax Appellate Tribunal, “SMC” BENCH,

Before: SHRI YOGESH KUMAR U.S. & SHRI RAKESH MISHRA

For Appellant: Shri Siddharth Agarwal, AR

For Respondent: Shri Sumit Purkaystha, Sr. DR

Hearing: 12.08.2026Pronounced: 20.08.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, KOLKATA BEFORE SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER AND SHRI RAKESH MISHRA, ACCOUNTANT MEMBER ITA No.370/KOL/2026 Assessment Year: 2018-19

Ashim Kumar Modi Vs. DCIT, Circle-46, Kolkata C/o Subhash Agarwal & Associates, Advocates Siddha Gibson, 1, Gibson Lane, Suite 213, 2nd Floor, Kolkata-700069 [PAN: AFTPM0620E] APPELLANT RESPONDENT Appellant by : Shri Siddharth Agarwal, AR Respondent by : Shri Sumit Purkaystha, Sr. DR Date of hearing : 12.08.2026 Date of Pronouncement : 20.08.2026 O R D E R PER YOGESH KUMAR U.S., JUDICIAL MEMBER: This Appeal is filed by the Assessee against the order of the NFAC, Delhi (‘Ld. CIT(A)’ for short) dated 07.01.2026, passed u/s 250 of the Income Tax Act, 1961 (“the Act”, for short) for the Assessment Year 2018-19. 2. Brief facts of the case are that, Assessee filed return of income declaring a total income of Rs.13,02,780/-. The Department received an information regarding receipt of bogus GST invoices by the Assessee from M/s Devyansh Dealcom Private Limited. The reassessment proceedings initiated against the Assessee and an

ITA No.370/Kol/2026 Ashim Kumar Modi; A.Y: 2018-19 addition came to be made by calculating fair profit at 12.5% on the estimation basis on the purchase of Rs.89,40,000/- made from M/s Devyansh Dealcom Private Limited, which worked out at Rs.11,17,500/- which has been added to the income of the Assessee for the year under consideration vide assessment order dated 11.03.2024. Aggrieved by the Assessment Order dated 11.03.2024, Assessee preferred an Appeal before the Ld. CIT(A). The Ld. CIT(A) vide order dated 07.01.2026, dismissed the Appeal of the Assessee. As against the order of the Ld. CIT(A) dated 07.01.2026, Assessee preferred the present Appeal.

The Learned Counsel for the Assessee vehemently submitted that the Ld. CIT(A) erred in law and fact confirming the addition of Rs.11,17,500/- being 12.5% of alleged purchases of Rs.89,40,000/- merely on suspicion, conjunction and surmises. The Learned Counsel for the Assessee further submitted that the estimation of profit at 12% is not only illegal but also the same is higher in side. Thus, prayed for allowing the Appeal.

Per contra, the Ld. DR vehemently submitted that the Assessee failed to discharge the onus of providing the genuineness of the purchases, therefore, the Assessing Officer has rightly adopted the method of estimation of profit at 12.5%, which is not only reasonable but also fair and inconsonance with the various judicial precedents. Page | 2

ITA No.370/Kol/2026 Ashim Kumar Modi; A.Y: 2018-19 Thus, relying on the orders of the Lower Authorities sought for dismissal of the Appeal.

We have heard the parties and perused the material available on record. During the assessment proceedings, the Assessing Officer observed that ‘all the facts as discussed above, clearly indicate that the purchases themselves were either completely bogus and non- existent or that the purchases were actually made, but not from the parties from whom it was claimed to have been made and instead may have been purchased from grey market without proper billing or documentation and therefore, the fair profit element is embedded in the said transaction. In respect of the fact that the Assessee also has shown corresponding sales to these bogus purchases, therefor, the fair profit element is embedded in the said transaction’. Accordingly, the Assessing Officer has estimated the profit and assessed the profit at 12.5% on the purchases of Rs.89,40,000/- from M/s Devyansh Dealcom Private Limited and made addition of Rs.11,17,500/-. The Ld. CIT(A) while upholding the addition has also observed that the purchases were found to be not fully verifiable, but corresponding sales are not doubted. Therefore, the entire purchases amount cannot be disallowed and in such event the profit ailment embedded in such purchases cannot be said to be bogus. Accordingly, upheld the addition made by the Assessing Officer. Page | 3

ITA No.370/Kol/2026 Ashim Kumar Modi; A.Y: 2018-19 6. Considering the above facts and circumstances and also considering the business activities of the Assessee, as the Authorities below have admitted the fact that the purchases are not completely bogus or non-existence and purchases were actually made from market without proper billing or documentation, we reduce the estimation of profit from 12.5% to 6.5% on the purchases of Rs.89,40,000/-. Accordingly, addition of Rs.5,81,100/- is hereby sustained.

In the result, Appeal of the Assessee is partly allowed.

Order pronounced on 20.08.2026. Sd/- Sd/- (RAKESH MISHRA) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 20.08.2026 DP, PS Copy of the order forwarded to: 1. Appellant 2. Respondent 3. Pr. CIT 4. CIT(A) 5. CIT(DR) //TRUE COPY// (MANISH BHOI) DEPUTY REGISTRAR KOLKATA BENCHES, KOLKATA

ASHIM KUMAR MODI,HOWRAH vs. DCIT, CIRCLE 46, KOLKATA

What did the Tribunal hold?

What were the facts?

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Which sections of the Income-tax Act were involved?

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