Bogus purchase additions: documentary evidence upheld, and the restricted addition sustained after the Revenue failed to disprove genuineness.

Alleged bogus purchase additions were not found to be wholly unproved where the assessee produced invoices, bank statements, stock records, MCA records and other supporting documents. The Tribunal held that mere non-production of suppliers for cross-examination and a third-party affidavit retraction did not, by themselves, establish that the purchases were non-genuine, especially as the Assessing Officer brought no cogent material to disprove the documentary evidence. The Revenue's reliance on a jurisdictional High Court ruling was distinguished on facts. The first appellate authority's restriction of the addition to 4% was sustained.

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Issues: Whether the addition made on account of alleged bogus purchases should be sustained at 12.5%, enhanced to 100%, or restricted to the relief granted by the first appellate authority.

Analysis: The assessee produced purchase invoices, bank statements, stock records, MCA records, tax details, incorporation documents and other supporting material to substantiate the purchases. The assessment addition was made mainly because the suppliers were not produced for cross-examination and because of an affidavit retraction by a third party statement. The Tribunal found that the Assessing Officer did not bring cogent material to disprove the documents or establish that the purchases were wholly non-genuine. It also held that the jurisdictional High Court decision relied upon by the Revenue was distinguishable on facts because that case involved non-participation by the assessee in reassessment proceedings. In the circumstances, the Tribunal accepted the reasoning of the first appellate authority in restricting the addition to 4%.

Conclusion: The addition on alleged bogus purchases was not to be enhanced as claimed by the Revenue, and the relief granted by the first appellate authority was sustained.

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