An addition for bogus purchases cannot be sustained solely on the basis of general information received from a third-party department (like Sales Tax) when the assessee has provided exhaustive documentary evidence supporting the transactions and the revenue has neither doubted the sales nor rejected the books of accounts.

O R D E R

PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:

This appeal filed by the Revenue is against the order of CIT(A) National Faceless Appeal Centre (NFAC), Delhi, vide order no. ITBA/NFAC/S/250/2025-26/1077133500(1), dated 17.06.2025, passed against the assessment order by DCIT-11(2)(1), Mumbai, u/s. 143(3) r.w.s 147 of the Income-tax Act (hereinafter referred to as the “Act”), dated 23.02.2015 for Assessment Year 2009-10.

Grounds taken by the Revenue are reproduced as under:

“1. Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) is justified in deleting the disallowance/addition of Rs.69,16,038/- on account of bogus purchases without appreciating the fact that the said information was received from Sales department declaring purchases as non-genuine.

2. Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) erred in not appreciating the enquiry conducted by the AO during the course of assessment proceedings".

Brief facts of the case are that assessee is carrying on business of manufacturing of laboratory chemicals, reagents and dehydrated cultured media produce. It filed its return of income on 30.09.2009 reporting total income at Rs.98,52,834/-. Subsequently, ld. Assessing Officer received information to the effect that assessee has obtained accommodation entries from various entities, aggregating to Rs.69,16,038/-. These entities have been proclaimed by the Maharashtra Sales Tax Department as provider of accommodation bills. According to the ld. Assessing Officer, total purchases declared by the assessee includes purchases aggregating to this amount which are accommodation entries in nature. Relevant particulars in this regard are as under:

3.1. Assessee was asked to furnish copies of ledger account along with invoices raised, delivery challan, proof of transportation, etc. Ld. Assessing Officer also issued notice u/s.133(6) to the alleged four parties in respect of which three such notices were returned back by the postal authorities, with the remark “left” and for one of the party no such reply was received. Assessee furnished its details vide letter dated 07.01.2015 placed in the paper book. In this submission, for each of the four parties, it furnished all the required documentary evidences which included copies of purchase invoices, ledger accounts, bank statement effecting the payments against the purchases from the said parties, delivery challans, certificate from the bank stating clearance of the payments made by the assessee. It was also explained in the same submission that these purchases made are of raw material for production of laboratory chemicals. Assessee also furnished the address of each of the parties, as available with it in its record. The details so furnished for each of the party in this submission are reproduced below for ready reference:

“1. M/s Applause Chemicals Pvt Ltd [Annexure 1 Pg.No.1-101]

a) The copies of the purchase invoices and delivery challans for the purchases made during the period 01.04.2008 to 31.03.2009 of all the four parties are enclosed herewith

b) The ledgers of transactions with the purchase parties are enclosed herewith

c) All the payments are made by account payee cheques, to prove the same we are enclosing herewith the bank statements highlighting the payment entries.

d) The original certificate obtained from the Bank stating