Bogus purchase disallowance sustained where suppliers were untraceable and documentary support was found insufficient.

Disallowance of 12.5% of alleged bogus purchases was sustained where the assessee failed to produce the suppliers, confirmations, or transportation evidence, and notices to the parties were returned unserved. The surrounding material showed that the suppliers were non-existent and were accommodation entry providers, so the purchases were treated as supported only by paperwork. On these facts, the Revenue's addition on account of bogus purchases was upheld and the assessee's challenge failed.

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Issues: Whether disallowance restricted to 12.5% of alleged bogus purchases was justified.

Analysis: The assessee could not produce the alleged suppliers, confirmations, or transportation evidence, and notices issued to the parties returned unserved. The purchases were treated as supported only by paperwork, while the surrounding material showed that the suppliers were non-existent and accommodation entry providers. In these circumstances, the addition made by the Revenue authorities on account of bogus purchases was sustained.

Conclusion: The disallowance of 12.5% of the bogus purchases was upheld and the assessee's challenge failed.

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