ORDER

PER RAKESH MISHRA, ACCOUNTANT MEMBER:

This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2018-19 dated 04.11.2025.

2. The assessee is in appeal before the Tribunal raising the following grounds of appeal:

“1. That on the facts and in the circumstances of the case the Ld. CIT(A), NFAC is wrong, unjust and has erred in law in confirming the addition made by the Ld.AO, NFAC merely on surmises and suspicion, without recording justifiable dissatisfaction with the appellant's explanations regarding the genuineness of purchases.

2. That the authorities below failed to appreciate that the assessee had furnished comprehensive evidencial details of suppliers (name, address, PAN, GST details, invoices, bank payments, confirmation of statement of Accounts, Trade Licence of supplier etc.) in support of genuineness of purchases.

3. That the learned CIT(A), NFAC in confirming the addition on account of purported bogus purchases for non compliance of GSTR by suppliers which could have a bearing on the ITC claimed by the Assessee but the entire purchase cannot be consideded (considered) as bogus purchase when comprehensive details of purchases supported with evidence was provided to the authorities.

4. That the learned CIT(A), NFAC erred in confirming the addition on account of bogus purchases, ignoring that the corresponding sales were accepted and payments were made through banking channels, which is contrary to settled judicial precedents.

5. That the disallowance of the entire purchase amount is not justified, and a reasonable Gross Profit (GP) rate should be applied on the sales corresponding to the disputed purchases, in Vine with the commercial realities and judicial decisions

6. That, the appellant craves leave to amend, alter, modify, substitute, add to, abridge and/or rescind any or all of the above grounds”

3. Brief facts of the case are that the assessee is an individual and carrying on the business of supply mainly hardware goods to Gram Panchayant under the name and style ‘New Bengal Hardware’ of Guskara Bus Stand, Purba Burdwan-713128. The assessee had prepared its books of account for the financial year ended on 31st March 2018 and the said books of account were audited u/s 44AB of the Act. Thereafter, the assessee filed his return of income for AY 2018-19 declaring total income of ₹11,92,700/- on 10.10.2018 which was processed u/s 143(1) of the Act on 10.02.2019. The Assessing Officer (hereinafter referred to as Ld. 'AO') issued notice u/s 148A(b) of the Act to the assessee on the basis of the information received from DDIT(Inv.)- 2(1), Kolkata and DDIT(Inv.)-1(4), Kolkata that Mr. Sumit Rajbhar, proprietor of M/s. Rajbhar Trade Commercial was engaged in generation of fake GST invoices to facilitate irregular input tax credits to other business entities and while doing this he also availed and utilized irregular input tax credit by others. The supplier had filed his return of income for the AY 2018-19 disclosing turnover of ₹60,68,62,642/- and had declared gross total income of ₹3,73,127/- with no fixed assets. The Department had construed that the said party was a paper entity with no financial worth and was used for providing accommodation entries in the guise of invoice issuance; therefore, transactions made by the entity were treated as sham transactions and all the sales made by the entity were held to be bogus sales and all the sales proceeds in the hand of the recipients were actually bogus purchases. The assessee was one of the beneficiaries having made bogus purchases from M/s. Rajbhar Trade Commercial during the FY 2017-18 relevant to the AY 2018-19 for an amount of ₹15,08,950/- and the amount had escaped assessment for AY 2018-19 being inadmissible expenses. The assessee appeared before the Ld. AO, made submissions and produced rele