Landmark Judgement by Supreme Court of the Country : No addition can be sustained if it is done purely on the basis if information received from Investigation Wing without giving an opportunity of cross examination to the Assessee
Key Observation :
“Thus, 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
Return. In view of the above discussion in totality, the purchases made by the appellant from M/s Padmesh Realtors Pvt. Ltd. is found to be acceptable and the consequent disallowance resulting in addition to income made for Rs.19,39,60,866/-, is directed to be
deleted
