The ITAT Hyderabad held that the addition of bogus purchases ...

ITAT held that onus shifted to AO to prove purchases were bogus. No positive evidence by Revenue.

Case Laws     Income Tax

May 24, 2024

The ITAT Hyderabad held that the addition of bogus purchases based on information from the Investigation Wing was not justified. The burden of proof shifted to the AO once the assessee provided documents and payments for the purchases. The AO should have examined the entities involved and provided evidence if the invoices were not genuine. The Revenue failed to present positive evidence against the genuineness of the purchases. The Tribunal emphasized that accepted sales and taxes paid by the assessee made it difficult to argue against the genuineness of purchases. The Tribunal rejected the Revenue's argument and cited legal precedents supporting the assessee's case. The right to cross-examine is a fundamental aspect of natural justice, and failure to provide this opportunity violates principles of fair play. The Tribunal allowed the appeal of the assessee based on these considerations.

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