Bogus purchase addition not sustainable where documentary evidence and supplier confirmation establish genuineness of transactions.

Where an assessee substantiates purchases with purchase bills, bank statements, supplier confirmation and supporting records, and the remand report also confirms the transactions through ledger and bank statements, an addition for alleged bogus purchases cannot be sustained on mere suspicion. The supplier's confirmation of sales and prior acceptance of similar purchases further supported genuineness, so the first appellate authority's deletion of the addition was upheld and the Revenue's appeal was dismissed.

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Issues: Whether the addition made on account of alleged bogus purchases was sustainable when the assessee produced purchase bills, bank statements, supplier confirmation and supporting material, and whether the Revenue's appeal against deletion of the addition deserved to be allowed.

Analysis: The assessee furnished documentary evidence to show the purchases and the identity of the supplier. The remand report recorded that the supplier confirmed the sales to the assessee and supported the transactions with ledger and bank statements. The supplier had also confirmed supply in the earlier year, and similar purchases from the same concern had been deleted in prior appellate proceedings. On these facts, the assessee was held to have discharged the onus of proving the genuineness of the purchases and the supplier.

Conclusion: The addition towards bogus purchases was not justified and the deletion made by the first appellate authority was upheld; the Revenue's appeal was dismissed.

Ratio Decidendi: Where an assessee substantiates purchases with primary documentary evidence and the supplier confirms the transactions, an addition for bogus purchases cannot be sustained merely on suspicion or a general allegation of non-genuineness.

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