Circular No. 10/2008 — Bogus purchases — enquiry before disallowance
Date: 2008-12-05 Status: ACTIVE Category: Business Income / Deductions Binding on Department: Yes (Section 119 / Section 400 IT Act 2025)
Summary
AOs must conduct proper enquiry before making disallowance for alleged bogus purchases. Addition cannot be made solely on Sales Tax department information.
Key Directions
- AO must make independent enquiry before treating purchases as bogus.
- Mere information from VAT/Sales Tax department insufficient.
- Cross-examination opportunity must be provided if third-party statements relied upon.
- Entire purchase not to be disallowed if goods received and used in business.
Applicability Under IT Act 2025
Saving Clause: Section 536 of IT Act 2025 saves circulars issued under the 1961 Act “so far as not inconsistent” with the new Act.
| Old Section (1961 Act) | New Section (2025 Act) | Consistent? |
|---|---|---|
| 37 | — | Needs Review |
| 69C | — | Needs Review |
Cross-References
Act Sections
- Section 37
- Section 69C
Related Circulars
- None identified
Key Case Law (Circular Supremacy)
- To be populated — cases where this circular was cited/applied
Full Text
Full text to be added — see raw/circulars/ for PDF when available
Source
- Official: incometaxindia.gov.in/circulars