The Income Tax Officer, Ward 1, Shivamogga vs. Smt. Suvarna

Parties Involved

Facts Summary

The assessee, Smt. Suvarna, is an individual engaged in the business of trading in Areca nuts. She filed her return of income on 4th January 2022 declaring a total income of Rs. 8,77,060. The return was processed under section 143(1) and selected for scrutiny. The Assessing Officer (AO) observed that the assessee made substantial purchases from suppliers who either did not file returns or had no business income reflected in their returns. The AO suspected that the assessee had booked bogus purchases. To verify the genuineness of these purchases, the AO issued questionnaires under section 142(1) and notices under section 133(6). The assessee failed to provide adequate documentary evidence to support her claims, leading the AO to disallow purchases worth Rs. 13,13,06,800. Aggrieved by this order, the assessee appealed to the Commissioner of Income Tax (Appeals) (CIT(A)), who allowed the appeal and deleted the addition. The revenue then appealed to the Income Tax Appellate Tribunal (ITAT).…

Legal Issues

• 1. Whether the CIT(A) correctly allowed the assessee's appeal without conducting a proper inquiry.
• 2. Whether the matter should be restored to the AO for a fresh inquiry.

Judgment Outcome

Decided in favour of Revenue.

Precedents Relied Upon

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