Bogus purchases allegations in tax assessments sustained by purchase records lead to deletion of substantial purchase disallowance.

Allegations of bogus purchases were examined with focus on evidentiary onus; acceptance of sales turnover was treated as corroborative and purchases could not be disallowed solely because some suppliers did not respond fully to inquiries. Purchases substantiated by purchase invoices, ledger extracts, GST and PAN registration details, and bank payments were held to satisfy evidentiary requirements, and absence of supplier tax filings or email IDs did not by itself render transactions fictitious. A large percentage disallowance of purchases was found unsupported and consequently deleted, resulting in relief to the taxpayer.

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Issues: Whether the Assessing Officer was justified in disallowing purchases and making additions on account of alleged unverified/unexplained or non-genuine purchases; and whether the Commissioner of Income Tax (Appeals) was justified in deleting those additions.

Analysis: The adjudication examined whether the assessee had discharged the onus of substantiating purchases challenged in scrutiny assessment proceedings. The factual matrix showed accepted sales turnover, purchase invoices, ledger extracts, GST registration details, PAN and bank account details of suppliers, and bank payments for purchases. Two suppliers failed to furnish full details in response to notices under Section 133(6), but no allegation of collusion, fund-routing back, or non-delivery of goods was made. The assessing officer's disallowance was predominantly based on non-filing of returns by some suppliers and lack of email IDs rather than on positive evidence of non-existent transactions. The appellate authority applied principles concerning proof of genuineness, relevance of corroborative documentary evidence (invoices, bank payments, GST/PAN), and the logic that accepted sales supported the existence of corresponding purchases. The tribunal found the factual and documentary material sufficient to rebut the AO's suspicion and to uphold the deletion by the first appellate authority.

Conclusion: The deletion of additions made by the Assessing Officer was affirmed; the revenue appeals are dismissed and the Assessing Officer's disallowances are not sustained.

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