The present case was reopened by the AO on the ground that information received from Sales Tax Department that the assessee has obtained entries of bogus purchases from the Hawala Dealers and during AY 2008-09, assessee has obtained accommodation entries of bogus purchases from various Hawala dealers and have inflated the purchases and accordingly reduced profit. AO had confronted assessee as to show complete details of purchases. In response, assessee contended that complete details of bills, which were being alleged as taken through hawala dealer be supplied to him. Thereafter, AO noted that assessee did not submit such details, and ultimately, assessment was finalized.

CIT(A) held that there was no corroborative evidence against the assessee and ruled in favour of assessee.

On appeal to Tribunal, it was held that details submitted by Sales-tax Department shows that those details were for AY 2009-10 and not AY 2008-09. It was for Revenue to first prove charge against assessee, only thereafter assessee would be required to explain his position about that matter. It was for AO first to demonstrate with help of some reliable evidence that entries were taken by assessee. There was no such evidence possessed by Revenue. Therefore, Tribunal held that in the absence of any corroborative evidence, purchases made by assessee from Hawala dealers could not be treated as bogus purchases and added to total income. Accordingly, Tribunal ruled in favour of assessee.  (AY. 2008-09, 2009-10, 2010-11)