CIT vs. Odeon Builders Pvt. Ltd (Supreme Court)
S. 68/69 Bogus Purchases: Disallowance cannot be made solely on
third party information without subjecting it to further scrutiny. The
assessee has prima facie discharged the initial burden of substantiating
the purchases through various documentation including purchase bills,
transportation bills, confirmed copy of accounts and the fact of payment
through cheques, & VAT Registration of the sellers & their
Income Tax Return. The AO has also not provided a copy of the
statements to the assessee, thus denying it opportunity of cross
examination
The entire disallowance in this case is based on third party information
gathered by the Investigation Wing of the Department, which have not
been independently subjected to further verification by the AO who has
not provided the copy of such statements to the appellant, thus denying
opportunity of cross examination to the appellant, who has prima facie
discharged the initial burden of substantiating the purchases through
various documentation including purchase bills, transportation bills,
confirmed copy of accounts and the fact of payment through cheques,
& VAT Registration of the sellers & their Income Tax Returnthe
entire disallowance in this case is based on third party information
gathered by the Investigation Wing of the Department, which have not
been independently subjected to further verification by the AO who has
not provided the copy of such statements to the appellant, thus denying
opportunity of cross examination to the appellant, who has prima facie
discharged the initial burden of substantiating the purchases through
various documentation including purchase bills, transportation bills,
confirmed copy of accounts and the fact of payment through cheques,
& VAT Registration of the sellers & their Income Tax Return