ITAT Bangalore: Bogus Purchase Addition Cannot Be Made Without Independent Inquiry-Entire Disallowance Deleted

Kuppaswamy Murthy Vs ITO (ITAT Bangalore) In the case of Kuppaswamy Murthy, the Bangalore ITAT deleted the addition of ₹20.16 lakh made on account of alleged bogus purchases from a supplier flagged by the Commercial Tax Department. The AO had treated purchases as bogus solely because the supplier (M/s Royal Enterprises) was identified as a bill trading/entry provider, despite the assessee furnishing: Purchase invoices, Bank payment proof, Sales and books of account. However, ITAT found critical flaws in the assessment (pages 12–14): No independent enquiry was conducted by the AO, No ver...