Bogus purchase additions require independent corroboration; untested third-party statements and denied cross-examination could not sustain the estimate.

Where alleged bogus purchases are supported by invoices, bank records, export documents, supplier affidavits and quantitative stock reconciliation, and the authorities do not identify any specific defect or conduct independent enquiry, an addition based only on Investigation Wing material and third-party statements cannot be sustained, especially when that material is not furnished and cross-examination is denied. Accepted sales and a matching quantitative tally weaken a blanket accommodation-entry theory. The assessee was treated as having prima facie discharged the evidentiary burden, and the 10% estimated addition was deleted, subject to verification of the purchases against corresponding sales and the profit already offered to tax.

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Issues: Whether the addition sustained at 10% of the alleged bogus purchases was justified in the absence of independent corroboration and cross-examination, and whether the assessee had discharged the evidentiary burden by producing purchase records, bank documents, export records, and quantitative tally.

Analysis: The assessee produced purchase invoices, bank statements, export documentation, affidavits of the suppliers, and stock reconciliation mapping the purchases with corresponding exports. The authorities below did not point out any specific defect in these documents, nor did they conduct independent enquiry by issuing notices or summons to the suppliers. The addition was founded mainly on information from the Investigation Wing and statements of third parties, but those materials were not furnished to the assessee and no opportunity of cross-examination was granted. The accepted sales, quantitative tally, and absence of adverse material showed that the purchases could not be treated as wholly non-genuine merely on suspicion or on a general accommodation-entry theory. In these circumstances, the assessee had prima facie discharged the burden, and the sustained estimation at 10% could not stand.

Conclusion: The addition sustained by the first appellate authority was deleted, subject to verification of the alleged purchases with the corresponding sales and the profit already offered to tax.

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