Artificial Intelligence (AI) has emerged as a transformative technology that is reshaping various sectors, including the legal system. The increasing use of AI-generated content such as images, videos, audio recordings, and text has introduced new challenges regarding the admissibility, authenticity, and reliability of evidence in judicial proceedings. While AI enhances efficiency in legal research, digital investigations, and forensic analysis, it also facilitates the creation of sophisticated deepfakes and manipulated electronic records capable of misleading courts and undermining the administration of justice. The Bharatiya Sakshya Adhiniyam, 2023, recognises electronic records as documentary evidence; however, it does not specifically address the legal status or evidentiary standards applicable to AI-generated evidence. This legislative gap raises significant concerns relating to authentication, burden of proof, algorithmic transparency, privacy, and procedural fairness. This paper critically examines the legal challenges associated with AI-generated evidence in Indian courts through an analysis of constitutional provisions, statutory enactments, landmark judicial decisions, and comparative international developments. It evaluates the adequacy of the existing legal framework in addressing emerging technological risks and highlights the necessity of specialised forensic mechanisms, judicial training, and legislative reforms. The study argues that a comprehensive regulatory framework is essential to ensure that AI-generated evidence is used responsibly without compromising the principles of natural justice, due process, and the rule of law. Strengthening legal safeguards will enable the Indian judiciary to effectively respond to technological advancements while maintaining public confidence in the justice delivery system.