Section 69C purchase evidence gaps support limited addition where accepted sales and stock records substantiate trading transactions.
Section 69C permits addition only where expenditure remains unexplained; accepted sales, undisputed trading results, purchase invoices, GST returns and stock records weighed against treating all purchases as bogus. Missing transport documents, e-way bills and delivery challans prevented full acceptance, warranting a limited purchase adjustment rather than disallowance of the entire claimed amount, including GST. The addition for a discrepancy in income from other sources was deleted because the record and submissions did not support it.
Issues: (i) Whether entire claimed purchases, including the GST component, could be added under Section 69C where sales were accepted and purchase evidence was partly available; (ii) Whether the addition for discrepancy in income from other sources was sustainable.
Issue (i): Whether entire claimed purchases, including the GST component, could be added under Section 69C where sales were accepted and purchase evidence was partly available.
Analysis: Section 69C concerns expenditure whose source or explanation is not satisfactorily established. The declared sales were accepted and the trading results were not disturbed. Purchase invoices, GST returns and stock records were available, but critical evidence of actual movement and delivery of goods, including transport documents, e-way bills and delivery challans, was not furnished. The material therefore did not justify either complete acceptance of the purchases or their total disallowance.
Conclusion: The addition for alleged bogus purchases was restricted to Rs. 6,00,000, being 10% of Rs. 60,13,941, in favour of the assessee.
Issue (ii): Whether the addition for discrepancy in income from other sources was sustainable.
Analysis: The addition arose from the difference in income from other sources as compared with the original return. The material and submissions on record did not support its retention.
Conclusion: The addition of Rs. 16,146 was deleted, in favour of the assessee.
Final Conclusion: The adjustment relating to disputed purchases is confined to Rs. 6,00,000, and the separate addition for income from other sources does not survive.