Bogus purchases addition under section 69C: non-response to notice not conclusive, revenue failed to establish purchases.

Non-response to a statutory information notice is not conclusive proof that purchases are bogus; the revenue bears the burden of proving unexplained income when the assessee furnishes relevant evidence, and the assessing officer must further investigate and permit examination or cross-examination of relevant parties where authenticity is doubtful, resulting in dismissal of the revenues addition. Separately, where the assessing officer examined 26AS and TDS/TCS details and accepted the assessees explanation regarding non-deduction on freight payments, the objection on TDS nondeduction was rejected and the assessment reasoning upheld.

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Issues: (i) Whether additions under Section 69C for alleged bogus purchases can be sustained where the assessee produced books of account, invoices, GST records and bank payments and several suppliers did not respond to notices issued under Section 133(6); (ii) Whether additions on account of alleged non-deduction of tax at source from amounts paid to contractors for freight can be sustained.

Issue (i): Whether the addition of Rs. 15,17,83,873/- on account of alleged bogus purchases is sustainable.

Analysis: The issue was examined on the legal framework governing Section 69C and the evidentiary value of third-party responses to notices under Section 133(6). The material included audited books, invoices, bank payment evidence, GST returns (GSTR-2A) and confirmations from several suppliers; some suppliers had responded to notices while others had not. The Tribunal considered precedent principles that mere non-response to Section 133(6) notices does not by itself establish transactions as bogus, and that where books and corresponding sales are accepted and documentary evidence exists, the Revenue must further investigate and cannot base additions solely on non-responses. The Tribunal applied these principles to the facts and noted the Assessing Officer did not reject the books of account nor point to specific discrepancies warranting invocation of Section 69C.

Conclusion: Addition under Section 69C for alleged bogus purchases is deleted; decision is in favour of the assessee.

Issue (ii): Whether additions on account of alleged non-deduction of TDS from amounts paid to contractors for freight (Rs. 97,49,289/-) are sustainable.

Analysis: The Assessing Officer's examination of TDS/TCS information and 26AS was considered. The record shows the AO accepted the explanations offered by the assessee regarding the relevant entries and there was no substantive finding impairing the assessee's explanation.

Conclusion: Addition on account of alleged non-deduction of tax at source is dismissed; decision is in favour of the assessee.

Final Conclusion: Both grounds of the Revenue's appeals for the assessment years 2021-22 and 2022-23 are dismissed, resulting in deletion of the contested additions and rulings favourable to the assessee on the decided issues.

Ratio Decidendi: Non-response to notices issued under Section 133(6) is not by itself conclusive proof of bogus transactions; where the assessee produces reliable books of account, corroborative invoices, bank payment evidence and GST records and the AO has not identified specific defects in the books, additions under Section 69C cannot be sustained absent further investigation by the Revenue.

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