It all depends on region. Americans take the u's out of everything.
Favourite vs. Favorite.
Colour vs. Color.
Rumour vs. Rumor.
Flavour vs. Flavor.
They're all correct, but there's a proper version for where you live. If you live outside of the US, chances are, the 'u' is present.
And Amar, that's because your Word is probably set to read English (US)