Assessee-company filed its return of income, and same processed. Subsequently, a reopening notice was issued based on information received from the sales tax department regarding hawala transactions in respect of assessee. Assessing Officer passed the order and made an addition on account of bogus purchases. Commissioner (Appeals) restricted addition to 15 per cent of hawala purchases. Tribunal upheld said order. On appeal, the Court held that the information on the basis of which the addition of bogus purchases was to be made in the hands of assessee was never furnished by the Assessing Officer to the assessee.  The assessee also submitted that all payments were made by account payee cheques and submitted a certificate from the VAT Auditor in respect of the transaction from one of the suppliers. Since VAT assessment for the relevant assessment year was pending adjudication, merely relying on information of the Sales Tax Department without granting an opportunity to the assessee to cross-examine hawala purchasers to confirm purchases was a breach of principles of natural justice. Thus, lower authorities on appreciation of facts had rightly restricted additions at a rate of 15 per cent of alleged hawala purchases. Followed, PCIT v. SVD Resins and Plastics (P) Ltd. (2025) 305 Taxman 503 / 474 IR  151 (Bom) HC).  (AY. 2009-10)