TaxTMI 
TaxTMI 
2026 (1) TMI 919
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.... Ld. Assessing Officer [AO] u/s. 143(3) r.w.s 144B of the Act on 24-12-2022. The sole grievance of the revenue is deletion of addition of Rs. 1509.90 Lacs as made by Ld. AO on account of alleged bogus purchases while framing the assessment. The sole ground of appeal read as under: - Whether on the facts and in the circumstances of the case, the CIT(A) / NFAC was right in law in deleting the addition of Rs. 15,09,90,967/- as shown purchases expenses claimed by the assessee and NeFAC has added to the total income and taxed as income from other sources u/s 69C of the Act? 2. The Ld. CIT-DR advanced arguments supporting the assessment order whereas Ld. AR drew attention to various documentary evidences as filed by the assessee in su....
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....ng evidence was furnished by the assessee in support of purchases. Therefore, the books were rejected u/s 145(3) and the entire purchase of Rs. 1509.90 Lacs was added u/s 69C and the assessment was framed. Appellate Proceedings 4.1 During first appeal, the assessee assailed the verification as carried out by Ld. AO and again furnished various documents in support of the purchases. The assessee's submissions were subjected to remand proceedings. After considering assessee's reply and remand report, Ld. CIT(A) concurred that the assessee placed on record comprehensive documentary evidences to substantiate the purchases. The Ld. AO did not undertake any transactional level scrutiny of assessee's accounts or documentation. Instead of conf....
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....ion for such an extraordinary addition. It is settled principle of law that when an assessee had furnished primary evidences, the burden shifts to the revenue to dispute the claim with credible counter material. However, this burden was not discharged in the present case. Further, no adequate opportunity was granted to the assessee on the precise allegations. Therefore, such an assessment could not be upheld in law and was liable to be struck down in its entirety. The Ld. AO could have restricted the proposed addition only to the extent of specific transactions pertaining to those suppliers for whom enquiries had been conducted by verification unit. However, even in such a situation, any adverse inference could not be formed on the basis of....
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.... etc. was duly furnished by the assessee. By furnishing these documents, the assessee, in our considered opinion, had duly discharged the onus of substantiating these purchases and it was the onus of Ld. AO to contradict the same and bring on record cogent material evidences to prove its allegations. However, no such exercise is shown to have been carried out by Ld. AO. The verification by verification unit has been conducted only in three cases and that too, remain inconclusive. Further, the report of verification unit has not been confronted to the assessee which is in gross violation of principle of natural justice. 6. As rightly observed by Ld. CIT(A), the assessee had placed on record comprehensive documentary evidences to substanti....
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....y cogent analysis or justification for such an extraordinary addition. Therefore, the impugned additions could not be sustained in law. 7. Our aforesaid view is duly supported by the decision of Hon'ble Apex Court in the case of Odeon Builders Pvt. Ltd. (110 Taxmann.com 64) dismissing revenue's SLP against the decision of lower appellate forums holding that where the assessee had submitted purchase bills, transportation bills, confirmed copy of accounts and VAT Registration of sellers as also their Income-tax Return and payment was made through cheques, purchases could not be disallowed. The lower courts deleted the similar disallowance of purchases by observing that disallowance merely on the basis of third-party information denying cro....