ACIT Vs My Paper Merchants Pvt. Ltd. (ITAT Delhi)
No Cross-Examination, No Addition- ITAT Delhi deletes Bogus Purchase Disallowance- Addition u/s 69C on Alleged Bogus Purchases of ₹1.70 Cr Deleted – Documentary Evidence Proved Genuineness, Third-Party Statement without Cross-Examination held insufficient
Delhi ITAT dismissed Revenue’s appeal & upheld the order of CIT(A) deleting an addition of ₹1,70,19,475 made by the AO u/s 69C on account of alleged bogus purchases. The case arose after information from the Investigation Wing suggested that Assessee company had purchased from M/s S.K. Agencies, an alleged accommodation entry provider controlled by Shri Yashpal Gupta & associates. AO, relying on statements of Shri Yashpal Gupta, treated the purchases as bogus & disallowed them in full, adding the amount to Assessee’s income.
Before CIT(A), Assessee argued that the purchases were genuine & produced documentary evidence including GST invoices, stock registers, transportation bills, delivery proof, payment details through banking channels, & confirmations from the transporter. Assessee also requested cross-examination of Shri Yashpal Gupta, which was not provided by AO. CIT(A) found that the AO ignored these evidences & made the addition solely on third-party statements.CIT(A) relied on Supreme Court & Bombay High Court precedents (Odeon Builders Pvt. Ltd. & Sanjay Dhokad) to hold that once Assessee discharges its initial burden with supporting evidence, the onus shifts to the AO to rebut it, which was not done. Accordingly, the addition was deleted.
