Evidentiary sufficiency of purchases: invoices, bank payments and supplier confirmations can negate disallowance despite missing transport records.

Evidentiary sufficiency for claimed purchases was examined: where the assessee produced invoices, bank payment records, supplier confirmations, GST returns and stock registers and the revenue produced no reliable contrary material, absence of certain transport or weighment records and e-way bills did not defeat allowability of business expenditure. The legal effect is that documentary proof of payment and supplier corroboration can discharge the evidentiary onus under the Income-tax Act despite incomplete ancillary transport documentation, and consequently the impugned disallowance of purchases is deleted and the grounds allowed in favour of the taxpayer.

---

---

Issues: Whether the disallowance of purchases totaling Rs.1,20,65,111 made from three suppliers can be sustained where the assessee furnished purchase invoices, bank payment evidence, supplier confirmations, GST returns and related stock and transport documents.

Analysis: The issue involves whether the assessee discharged the evidentiary onus to demonstrate genuineness of purchases under the Income-tax Act despite non-availability of certain transport or weighment records. Relevant statutory provisions include Section 37 (allowability of business expenditure), assessment provisions under Section 143(3), Section 142(1) and inquiry power under Section 133(6) of the Income-tax Act, 1961; and the evidentiary interplay with GST requirements (e-way bills). The assessee produced purchase invoices, bank statements showing payments through banking channels, supplier ledger confirmations, GST returns and stock/purchase registers. No reliable contrary evidence was produced by the revenue to show that suppliers were non-existent or that payments were returned as cash-back. The revenue's reliance on absence of e-way bills and weighment slips was examined in light of GST thresholds and the nature of supplies (local short-distance, countable pieces, and certain weighment-based consignments). Where statutory or regulatory compliance (GST) does not conclusively address evidentiary sufficiency under the Income-tax Act, the primary question is whether documentary evidence before the revenue establishes the transactions. On the facts, the available bank payments, supplier confirmations and accounting records met the evidentiary requirement and no adverse material was produced to rebut the same.

Conclusion: The disallowance of purchases amounting to Rs.1,20,65,111 is deleted and the grounds challenging those disallowances are allowed in favour of the assessee; the appeal is partly allowed.

---