Bogus purchase addition cannot stand where documentary evidence is complete and supplier non-response under section 133(6) is the only basis.

Purchases cannot be treated as bogus merely because a supplier does not respond to a notice under section 133(6) when the assessee has produced audited financial statements, bank statements, invoices, purchase records, stock valuation, ledger accounts and supplier confirmation. Where payments are made through banking channels, the Revenue brings no material to show cash return, and the books of account and sales are not rejected or doubted, a disallowance based only on suspicion is not sustainable. On these facts, the addition made by disallowing purchases was directed to be deleted.

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Issues: Whether the addition of Rs. 68,47,010 made by disallowing purchases as bogus under section 37(1) of the Income-tax Act, 1961 could be sustained merely because the supplier did not respond to notice under section 133(6) of the Income-tax Act, 1961.

Analysis: The assessee furnished audited financial statements, bank statements, cash flow statement, purchase details, invoices, raw material purchase details, stock valuation, ledger accounts and confirmation from the supplier. The purchases were supported by banking-channel payments, and the Revenue did not bring any material to show that the payments came back to the assessee. The books of account were not rejected and the sales were not doubted. In these circumstances, non-compliance by the creditor with notice under section 133(6) could not, by itself, establish that the purchases were bogus or justify an addition based only on suspicion and surmises.

Conclusion: The disallowance was unsustainable, and the addition of Rs. 68,47,010 was directed to be deleted in favour of the assessee.

Ratio Decidendi: Where the assessee has discharged the primary onus by producing contemporaneous documentary evidence and the books of account are accepted, purchases cannot be treated as bogus merely because the supplier fails to respond to a notice under section 133(6) in the absence of contrary material.

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