Bogus purchases and section 69C addition fail where invoices, e-way bills and bank trail support genuine transactions.

An addition for alleged bogus purchases as unexplained expenditure under section 69C is not sustainable where the assessee substantiates the purchases with tax invoices, e-way bills, declarations, bank statements and other supporting documents, and the sales and closing stock are not disputed. The assessee's evidence was held sufficient to discharge the onus regarding the purchases and movement of goods. A mere allegation of GST irregularities in the supplier's case, or a claim of grey market sourcing, did not justify the disallowance. The addition was therefore deleted in favour of the assessee.

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Issues: Whether the addition made on account of alleged bogus purchases as unexplained expenditure under section 69C was sustainable when the assessee produced purchase invoices, e-way bills, bank statements and other supporting material, and when sales and closing stock were not doubted.

Analysis: The disallowance rested only on the allegation that the supplier had GST irregularities and that the assessee had not proved genuine purchase and actual movement of goods. The assessment record did not dispute the sales or closing stock. The assessee, however, produced tax invoices, e-way bills, declarations under the Excise and Taxation Department, and bank statements to support the purchases and payment trail. On these facts, the material on record was sufficient to discharge the assessee's onus regarding the purchases and movement of goods, and the alleged grey market nature of the transaction did not justify an addition under section 69C.

Conclusion: The addition for alleged bogus purchases was not sustainable and was deleted in favour of the assessee.

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