SRI PURNIMA MILK TRADERS,GUNTUR vs. THE INCOME TAX OFFICER, WARD-1(1), GUNTUR, GUNTUR

ITA 79/VIZ/2026Status: DisposedITAT Visakhapatnam31 August 2026AY 2022-2313 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the AO erred in treating trade creditors as unexplained cash credits when purchases were accepted as genuine. It also found the ad-hoc disallowance of expenses unjustified as the expenses were recorded and their sources explained.

What were the facts?

The assessee, engaged in milk trading, declared income for AY 2022-23. The Assessing Officer (AO) made additions for unexplained sundry creditors and ad-hoc disallowance of expenses, which were sustained by the CIT(A).

What were the issues?

Whether sundry creditors arising from accepted genuine purchases can be treated as unexplained cash credits under Section 68, and if ad-hoc disallowance of expenses is permissible without specific findings of incorrectness.

Which sections of the Income-tax Act were involved?

Section 68,Section 69C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM

Before: SHRI VIJAY PAL RAO, HON’BLE & SHRI MANJUNATHA G, HON’BLE

PER MANJUNATHA G, AM: This appeal is filed by the Assessee is directed against the order of Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter in short “Ld. CIT(A)”] vide DIN: ITBA/NFAC/S/250/2025- 26/1082522730(1) dated 12-Nov-2025 for the Assessment Year 2022-23. ITA 79/VIZ/2026 SRI PURNIMA MILK TRADERS

The order continues below.

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