Bogus purchase addition cannot stand when contemporaneous documents and banking records substantiate the assessee's transactions.

An addition for unexplained expenditure based on alleged bogus purchases was held unsustainable where the assessee supported the transactions with purchase invoices, delivery challans, ledger accounts, inventory registers, bank statements, and transport records. The documentary evidence showed payment through banking channels and purchases made before cancellation of the supplier's GST registration. Suspicion and GST-related information about the supplier, without a reasoned rebuttal of the assessee's evidence, were insufficient to sustain the addition. The relief granted by the first appellate authority was therefore upheld in favour of the assessee.

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Issues: Whether the addition made under section 69C on account of alleged bogus purchases and unexplained expenditure from Bright Corporation was sustainable.

Analysis: The assessee produced purchase invoices, delivery challans, ledger accounts, inventory registers, bank statements showing payments through banking channels, and vehicle movement and lorry receipt details. These materials were not dealt with by the Assessing Officer, and the purchases were shown to have been made prior to cancellation of the supplier's GST registration. On these facts, the allegation of unexplained expenditure was not established merely on suspicion or on the basis of GST-related information about the supplier.

Conclusion: The addition under section 69C was not justified and the relief granted by the first appellate authority was upheld in favour of the assessee.

Final Conclusion: The assessment addition did not survive judicial scrutiny, and the Revenue's challenge failed while the assessee obtained relief on the disputed purchase addition.

Ratio Decidendi: An addition for unexplained expenditure cannot be sustained where the assessee substantiates the purchases with contemporaneous documentary evidence and the Revenue fails to dislodge that evidence with a reasoned examination.

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