ACIT Vs Indure Pvt. Ltd. (ITAT Delhi)
Bogus Purchase Addition Fails Where Sales Are Undisputed & Cross-Examination Denied: Delhi ITAT Dismisses Revenue Appeal
Delhi ITAT ‘C’ Bench in ACIT Vs. Indure Pvt. Ltd. [ITA No. 4640/Del/2024, AY 2013-14, order dated 31.12.2025] dismissed Revenue’s appeal and upheld deletion of additions of ₹4.64 crore made on account of alleged bogus purchases. Reassessment was initiated based on Investigation Wing information alleging purchases from non-existing entities. Tribunal noted that AO relied entirely on third-party statements forming basis of reopening and additions, yet denied Assessee opportunity of cross-examination, resulting in violation of principles of natural justice. Assessee had furnished purchase bills and invoices, which AO rejected as “self-generated” without conducting any independent enquiry or bringing rebuttal evidence. Crucially, AO did not dispute corresponding sales or analyze stock records, and profits on such sales were accepted. Tribunal held that where sales are accepted as genuine, purchases cannot be treated as bogus; at best it could be a case of purchases from alleged bogus parties, not bogus purchases per se. Relying on Bombay HC in PCIT Vs. Nitin Ramdeoji Lohia, Tribunal observed that treating purchases as bogus while accepting sales leads to double taxation. In absence of independent enquiry and denial of cross-examination, additions were unsustainable. Revenue appeal was accordingly dismissed
