The Assessing Officer treated purchases made by the assessee, a civil contractor executing Government contracts, as bogus solely on the basis of Investigation Wing reports and statements of third parties without furnishing such statements or granting an opportunity of cross-examination. The assessee produced purchase bills, supplier confirmations, bank statements, inward registers and other documentary evidence establishing the genuineness of the purchases. The Tribunal held that the principles of natural justice had been violated and, in the absence of any rebuttal of the documentary evidence, the additions were unsustainable.  The assessee maintained complete books of account, material registers and proved payment for purchases and receipt of sale proceeds through account-payee cheques. The Tribunal held that once the assessee discharged the initial burden of proving the identity of suppliers and genuineness of purchases, the burden shifted to the Revenue to disprove the evidence. In the absence of any evidence that the payments had returned to the assessee, the purchases could not be treated as bogus. The Tribunal held that the execution of Government contracts necessarily established consumption of materials and no discrepancy had been pointed out by the Government authorities. Since the sales/work receipts were accepted and the assessee had already declared a reasonable gross profit, no further addition was justified.  (AY. 2007-08 to 2009-10).