“sundry creditors”

Cash Credits & Unexplained ItemsSection 68Section 681,806 judgments

The decision most relied on for sundry creditors is CIT v. Shri Vardhman Overseas Ltd. (343 ITR 408), cited in 76 judgments on BharatTax.

Leading authorities on sundry creditors

CIT v. Shri Vardhman Overseas Ltd.

343 ITR 408 · 2012 · High Court

citing judgments

An addition under Section 68 cannot be made for genuine sundry creditors or trade payables merely carried forward from previous assessment years if there is no fresh credit in the relevant assessment year. Section 41(1) does not apply to acknowledged outstanding liabilities without actual remission or cessation.

CIT v. Pancham Dass Jain

205 CTR 444 · 2006 · High Court

citing judgments

Section 68 of the Income-tax Act is not attracted to amounts representing purchases made on credit or outstanding trade creditors, especially when the genuineness of the purchases is accepted by the department.

CIT v. Prameshwar Bohra

301 ITR 404 · 2008 · High Court

citing judgments

An amount already credited in the books of account in an earlier assessment year cannot be added again as an unexplained cash credit under Section 68 of the Income-tax Act in a subsequent assessment year.

CIT v. Nitin S. Garg

208 Taxmann 16 · 2012 · High Court

citing judgments

A trading liability acknowledged and continued to be shown in the balance sheet cannot be treated as cessation of liability under Section 41(1) merely because it remained outstanding for several years, unless the assessee has written it off in its books. The Assessing Officer must prove that the assessee obtained a benefit.

CIT v. Bhogilal Ramjibhai Atara

43 Taxmann.com 55 · 2014 · High Court

citing judgments

Section 41(1) of the Income Tax Act applies only where there is remission or cessation of a trading liability during the previous year relevant to the assessment year, and not merely because the assessee cannot provide confirmations for sundry creditors.

CIT v. Padamchand Ramgopal

76 ITR 719 · 1970 · Supreme Court

citing judgments

Minor irregularities in books of account cannot be the sole basis for rejection of the books or for making an estimated trading addition, especially when the assessee has provided explanations for discrepancies. The case distinguishes itself by focusing on receipts not brought into account rather than expenses claimed.

CIT v. Sita Devi Juneja

325 ITR 593 · 2010 · High Court

citing judgments

A liability cannot be presumed to have ceased to exist merely because it has been outstanding for several years. Without a bilateral act between the assessee and the creditor indicating cessation, additions under section 41(1) are not permissible.

CIT v. Best Wood Industries and Saw Mills

11 Taxmann.com 278 · 2011 · High Court

citing judgments

Once an assessment is reopened for a valid reason under Section 148(2), the Assessing Officer can bring to tax any escaped income that comes to their notice during the reassessment, even if it was not the original basis for reopening.

Judgments citing sundry creditors

Haryana Building and Other Construction Workers Welfare Board, Panchkula vs. DCIT, Exemption, Chandigarh

In the result, this appeal of the Assessee stands dismissed

ITA 337/CHANDI/2023[2016-17]Status: DisposedITAT Chandigarh10 Oct 2025AY 2016-17

Bench: Shri Laliet Kumar & Shri Krinwant Sahayआयकर अपील सं./ Ita No. 237/Chd/2020 निर्धारण वर्ष / Assessment Year : 2014-15 Haryana Building & Other Construction Workers Welfare Board, Bays No. 29- 30, Sector 4, Panchkula, Haryana The Dcit, बनाम Circle 2, Vs. Exemption, Chandigarh स्थायी लेखा सं./ Pan No: Aaath6995H अपीलार्थी/Appellant प्रत्यर्थी/Respondent आयकर अपील सं./ Ita Nos.337 To 339/Chd/2023 निर्धारण वर्ष / Assessment Years : 2016-17, 2017-18 & 2018-19 Haryana Building & Other Construction Workers Welfare Board, Bays No. 29- 30, Sector 4, Panchkula, Haryana The Dcit बनाम Exemption, Vs. Chandigarh स्थायी लेखा सं./ Pan No: Aaath6995H अपीलार्थी/Appellant प्रत्यर्थी/Respondent आयकर अपील सं./ Ita No. 63/Chd/2021 निर्धारण वर्ष / Assessment Year : 2015-16 Haryana Building & Other Construction Workers Welfare Board, Bays No. 29-30, Sector 4, Panchkula, Haryana The Dcit बनाम Exemptions, Vs. Chandigarh स्थायी लेखा सं./ Pan No: Aaath6995H अपीलार्थी/Appellant प्रत्यर्थी/Respondent ( Physical Hearing ) निर्धारिती की ओर से/Assessee By : Sh. Nikhil Goyal, Advocate, Sh. Ashok Goyal, Ca & Sh. Sifatfreet Singh, Ca राजस्व की ओर से/ Revenue By : Sh. Manav Bansal, Cit Dr सुनवाई की तारीख/Date Of Hearing 08.12.2025 उदघोषणा की तारीख/Date Of Pronouncement 10.12.2025 आदेश/Order Per Bench: The Captioned Appeals Preferred By The Assessee Are Directed Against The Separate Orders Of The Ld. Commissioner Of Income- Tax (Appeals) For Different Assessment Years, As Per The Details Given Below: S.No.

For Appellant: Sh. Nikhil Goyal, AdvocateFor Respondent: Sh. Manav Bansal, CIT DR

Section 263

placed. Similarly, our attention was invited to paper book pages 40-86 wherein reply relating to query at (b) in respect of sundry creditors was placed. Similarly, pages 109- 124 were referred to highlight that the query regarding unsecured loan was also made by the Assessing Officer and in reply

Hanumanthappa Pathrera Laxmana, Shivamogga vs. Income Tax Officer, Ward-(1) & Tps, Shimogga

In the result, the assessee’s appeal is partly allowed whereas the Revenue’s appeal is dismissed

ITA 247/BANG/2025[2020-21]Status: DisposedITAT Bangalore09 Oct 2025AY 2020-21

Bench: Shri Narender Kumar Chodhry & Shri Waseem Ahmedassessment Year: 2020-21

For Appellant: Shri Atul K Alur, AdvocateFor Respondent: Shri Shivanand H Kalakeri, JCIT (DR)

Section 145(3)Section 69C

purchases to the extent of 10% as bogus (₹30,66,03,197) and further alleged that the ld. CIT-A erred in treating the sundry creditors (₹8,62,40,984) as bogus. 3. The Assessing Officer during the assessment proceedings found that there are certain purchases which do not seem ... whereas it has shown low- . ITA No.247 & 1066/Bang/2025 Page 3 of 8 income /receipt in the income tax return and therefore the AO added sundry creditors of ₹8.62 crores, treating them as unexplained liabilities. On appeal, the ld. CIT(A) noted that sales of ₹54.66 crores had been accepted

Income Tax Officer, Ward-1 & Tps, Shivamogga vs. Hanumanthappa Pathrera Laxmana, Shivamogga

In the result, the assessee’s appeal is partly allowed whereas the Revenue’s appeal is dismissed

ITA 1066/BANG/2025[2020-21]Status: DisposedITAT Bangalore09 Oct 2025AY 2020-21

Bench: Shri Narender Kumar Chodhry & Shri Waseem Ahmedassessment Year: 2020-21

For Appellant: Shri Atul K Alur, AdvocateFor Respondent: Shri Shivanand H Kalakeri, JCIT (DR)

Section 145(3)Section 69C

Dhananjay Tradelink Pvt. Ltd., Ahmedabad vs. The ITO, Ward-1(1)(3), Ahmedabad

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 842/AHD/2025[2018-19]Status: DisposedITAT Ahmedabad08 Oct 2025AY 2018-19

Bench: Dr. B.R.R. Kumar, Vice-Ms Suchitra Kamble

For Appellant: Shri S.N Divetia, with Shri Samir Vora, ARsFor Respondent: Shri Rignesh Das, CIT. DR

Section 133(6)Section 143(3)Section 250Section 68

addition of Rs.14,39,98,052/- consisting of Rs. 6,02,41,420/- towards unsecured loans and Rs. 8,37,56,632/- towards sundry creditors as unexplained income u/s 68 is wholly illegal, unlawful and against the principles of natural justice. Asst. Year ... addition of Rs. 14,39,98,052/- consisting of Rs. 6,02,41,420/- towards unsecured loans and Rs. 8,37,56,632/-towards sundry creditors as unexplained income u/s 68. 3.2 That the in the facts and circumstances of the Id. CIT(A), ought not to have upheld

Mohd Gulzar, Delhi vs. ITO, Ward 63(5), New Delhi

In the result, the appeal filed by the assessee is partly allowed

ITA 4097/DEL/2024[2012-13]Status: DisposedITAT Delhi08 Oct 2025AY 2012-13

Bench: SHRI S. RIFAUR RAHMAN (Accountant Member), SHRI ANUBHAV SHARMA (Judicial Member)

For Appellant: Shri Salil Kapoor, AdvocateFor Respondent: Shri Dheeraj Kumar Jain, Sr. DR

Section 142(1)Section 143(3)Section 145(3)

Rs.6,89,638/- (0.049%). The AO also noticed that during the year, assessee had shown purchase of Rs.1,74,90,598/- and shown sundry creditors of Rs.59,82,600/-. During the previous assessment proceedings, the A.R. of the assessee appeared/submitted that as per practice followed from year to year, purchase ... sellers who were shepherds and were nomads they do not maintain their permanent residence at one place. The A.O. observed that only list of sundry creditors provided but no details of address, or confirmation submitted. The AO further stated in his assessment order that various opportunities were provided

Gec Infrastructure Co., Butibori vs. Income Tax Officer, Ward 3(4), Nagpur

In the result, the appeal filed by the assessee’s is allowed for statistical purposes

ITA 100/NAG/2024[2007-2008]Status: DisposedITAT Nagpur07 Oct 2025AY 2007-2008

Bench: Shri Pavan Kumar Gadalegec Infrastructure Co. A–15/5,,Midc Industrial Area, Butibori, Nagpur 441 112, ……………. Appellant Maharashtra. Pan – Aagfg3541E V/S Income Tax Officer ……………. Respondent Ward–3(4), Nagpur. Assessee By :Shri R.K. Ganeriwal.Ar Revenue By :Shri Surjeet Kumar Shah.Sr.Dr

For Appellant: Shri R.K. Ganeriwal.ARFor Respondent: Shri Surjeet kumar shah.Sr.DR

Section 142(1)Section 143(3)Section 254

assessee was called upon to explain the reasons for outstanding balances over due and to substantiate the business transactions with the sundry creditors. The assessee has filed the information and details, Whereas the Assessing Officer was not satisfied with the explanations and made addition

Deputy Commissioner of Income Tax, Range-4, Lucknow vs. Shri Pawan Kumar Tiwari, Lucknow

In the result, the appeal of Revenue is allowed for statistical purposes

ITA 88/LKW/2020[2013-14]Status: DisposedITAT Lucknow07 Oct 2025AY 2013-14

Bench: Shri Kul Bharat & Shri Anadee Nath Misshradcit, Range-4. V. Shri Pawan Kumar Aaykar Bhawan, 5, Ashok Marg, Tiwari Lucknow-226001. Prop. Suneet Enterprises 31, Para Road, Rajajipuram, Lucknow. Pan:Acdpt1500B (Appellant) (Respondent) Appellant By: None Respondent By: Shri Puneet Kumar, Cit(Dr) O R D E R

For Appellant: NoneFor Respondent: Shri Puneet Kumar, CIT(DR)

Section 143(3)Section 41(1)

erred in law & on facts of the case in deleting the addition of Rs.3,84,84,465/- in respect of sundry creditors without appreciating the fact that the assessee could not established proving genuineness of outstanding sundry creditors

Dy. Commissioner of Income Tax, Central Circle 4(1), Mumbai vs. Khopoli Investments Ltd, Mumbai

In the result, both Assessee’s and Revenue’s appeals are dismissed

ITA 3846/MUM/2025[2014-15]Status: DisposedITAT Mumbai07 Oct 2025AY 2014-15

Bench: Shri Anikesh Banerjee & Shri Prabhash Shankarkhopoli Investments V/S. Deputy Commissioner Of Limited बनाम Income Tax, Central Circle– 206, 1St Floor, Dalamal 4(1), 420, 4Th Floor,Kautilya House, J.B. Marg Nariman Bhavan, Bandra Kurla Complex, Point, Mumbai – 400 021, G-Block, Bandra East, Mumbai Maharashtra – 400 051, Maharashtra स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aaack1740J Appellant/अपीलाथी .. Respondent/प्रतिवादी Deputy Commissioner Of Income V/S. Khopoli Investments Tax, Central Circle–4(1), 420, बनाम Limited 4Th Floor, Kautilya Bhavan, 206, 1St Floor, Dalamal Bandra Kurla Complex, G-Block, House, J.B. Marg Bandra East, Mumbai – 400 051, Nariman Point, Mumbai – Maharashtra 400 021, Maharashtra स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aaack1740J Appellant/अपीलार्थी .. Respondent/प्रतिवादी Assessee By : Shri Priyank Ghia,Ar Revenue By: Shri Ritesh Misra, (Cit Dr) Date Of Hearing 07.08.2025 Date Of Pronouncement 07.10.2025 आदेश / O R D E R Per Prabhash Shankar [A.M.] :- 1. The Above Captioned Appeal Ita No. 3789/Mum/2025 Is Preferred By The Assessee & Ita No. 3846/Mum/2025 Is Filed By P A G E | 2

For Appellant: Shri Priyank Ghia,ARFor Respondent: Shri Ritesh Misra, (CIT DR)

Section 132Section 132(4)Section 143(3)Section 68

3846/Mum/2023 A.Y. 2014-15 Khopoli Investments Limited parties through banking channels and that these parties were recorded as sundry creditors in the books of the appellant. c. It is respectfully submitted that:  The documents filed before the CIT(A) are clarificatory in nature and supplement the earlier submissions made during

Khopoli Investments Limited, Mumbai vs. Deputy Commissioner of Income Tax -4, Mumbai

In the result, both Assessee’s and Revenue’s appeals are dismissed

ITA 3789/MUM/2025[2014-15]Status: DisposedITAT Mumbai07 Oct 2025AY 2014-15

For Appellant: Shri Priyank Ghia,ARFor Respondent: Shri Ritesh Misra, (CIT DR)

Section 132Section 132(4)Section 143(3)Section 68

Income Tax Officer-19(1)(5), Mumbai vs. Harishkumar Vastimal Mehta, Mumbai

In the result, the appeal is allowed for statistical purposes

ITA 2247/MUM/2025[2016-17]Status: DisposedITAT Mumbai06 Oct 2025AY 2016-17

Bench: Shri Narender Kumar Choudhry & Shri Prabhash Shankarincome Tax Officer – V/S. Harishkumar Vastimal 19(1)(5), Room No. 502, 5 Th बनाम Mehta Floor, Piramal Chambers, Office No. 16, 2Nd Floor, Lalbaug, Parel, Mumbai – Kikabhai Mansion 7, Kika 400 012, Maharashtra Street, Gulalwadi, Mumbai – 400 004, Maharashtra स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aampm4020A Appellant/अपीलार्थी .. Respondent/प्रतिवादी

For Appellant: Shri Pankaj Jain, ARFor Respondent: Shri Hemanshu Joshi, (Sr. DR)

Section 133(6)Section 143(3)

income was filed declaring total income of Rs 4,89,230/-. The case was selected for scrutiny in respect of unsecured loans and sundry creditors to whom notices u/s 133(6) of the Act were sent by the AO. However,no confirmations were received from these parties. The assessee ... being Unsecured loans and P a g e | 3 A.Y. 2016-17 Harishkumar Vastimal Mehta Rs. 92,46,533/-, being Sundry creditors were considered unexplained and non-genuine and added to the returned income. 4. In the subsequent appeal filed before the ld.CIT(A), the assessee furnished various details contending

Income Tax Offier-19(1)(5), Mumbai vs. Heena Ashok Joshi, Mumbai

In the result, both the appeals of the Revenue Department are dismissed

ITA 2248/MUM/2025[2011]Status: DisposedITAT Mumbai30 Sept 2025

Bench: Shri Narender Kumar Choudhry & Shri Prabhash Shankar

For Appellant: NoneFor Respondent: Shri Hemanshu Joshi, Ld. Sr. D.R

Section 132Section 132(4)Section 147Section 148Section 250Section 68

under consideration and such question could be examined only in the year in which the entries were first made in the accounts of the sundry creditors." 5. Further in the very recent judgment. The Honourable High Court of Mumbai on 12th June, 2020 in the Income Tax Appeal

Income Tax Officer-19(1)(5), Mumbai vs. Heena Ashok Joshi, Mumbai

In the result, both the appeals of the Revenue Department are dismissed

ITA 2232/MUM/2025[2010]Status: DisposedITAT Mumbai30 Sept 2025

Bench: Shri Narender Kumar Choudhry & Shri Prabhash Shankar

For Appellant: NoneFor Respondent: Shri Hemanshu Joshi, Ld. Sr. D.R

Section 132Section 132(4)Section 147Section 148Section 250Section 68

Sunil Bansal, Delhi vs. Income Tax Officer, Ward-55(3), Delhi

In the result, the appeal filed by the assessee is allowed

ITA 194/DEL/2024[2014-15]Status: DisposedITAT Delhi30 Sept 2025AY 2014-15

Bench: SHRI SATBEER SINGH GODARA (Judicial Member), SHRI S. RIFAUR RAHMAN (Accountant Member)

For Appellant: Shri Somil Aggarwal, AdvocateFor Respondent: Shri Manish Gupta, Sr. DR

Section 133(6)Section 143(1)Section 143(2)

yielding GP of 0.67% and net profit of 0.26%. The AO on perusal of the Balance Sheet noticed that assessee has shown sundry creditors outstanding at Rs.8,82,71,609/-. In this regard, the assessee was asked to furnish details/confirmation in respect of the above sundry creditors for further verification ... assessee has furnished the details of sundry creditors. The notices were returned unserved by the postal authorities with the remark “not known and left”. The same was confronted with the assessee. The assessee has submitted copies of ledger account showing the purchases made from these creditors. In order to verify

Adhunik Technology Pvt. Ltd, New Delhi vs. ACIT, Central Circle-18, New Delhi

The appeals are allowed

ITA 8848/DEL/2019[2012-13]Status: DisposedITAT Delhi30 Sept 2025AY 2012-13

Bench: Shri Anubhav Sharma & Shri Amitabh Shukla

For Appellant: Shri K. Sampath, Advocate &For Respondent: Ms Rajinder Kaur, CIT-DR

Section 133(6)Section 144Section 68

observes in para 2.1 as follows:- “2.1. After considering the submission of the assessee, the AO observed that the assessee submitted details of sundry creditors amounting to Rs. 15,37,15,000/- in respect of 8 parties. In order to verify the genuineness, the summons were issued ... impugned orders that ld. Tax authorities have examined the issue on the basis that the assessee was asked to explain the details of ‘sundry creditors’ reflected in the balance sheet and in order to verify the genuineness of the sundry creditors, summons were issued to the concerned parties. We find

Adhunik Technology Pvt. Ltd, New Delhi vs. ACIT, Central Circle-18, New Delhi

The appeals are allowed

ITA 8847/DEL/2019[2012-13]Status: DisposedITAT Delhi30 Sept 2025AY 2012-13

Bench: Shri Anubhav Sharma & Shri Amitabh Shukla

For Appellant: Shri K. Sampath, Advocate &For Respondent: Ms Rajinder Kaur, CIT-DR

Section 133(6)Section 144Section 68

DCIT, Circle-4(1)(1), Aligarh vs. Bharat Varshney, Aligarh

In the result, the revenue’s appeal is dismissed

ITA 102/AGR/2025[2022-23]Status: DisposedITAT Agra29 Sept 2025AY 2022-23

Bench: : Shri M. Balaganesh & Shri Sunil Kumar Singhassessment Year: 2022-23

Section 250Section 68

claim of 3 | P a g e short loan of Rs.1,61,75,000/- and repayment thereof and further by ignoring the issue of sundry creditors to the extent of Rs.1,65,25,255/- during the year under consideration? 8. Learned DR for the revenue has submitted that the assessee

M/S. Parishram Builders, Veraval vs. The Pr. Commissioner of Income Tax-1, Rajkot

In the result, appeal filed by the assessee, is allowed

ITA 98/RJT/2021[2015-16]Status: DisposedITAT Rajkot29 Sept 2025AY 2015-16

Bench: Dr. Arjun Lal Saini & Shri Dinesh Mohan Sinhaआयकर अपील सं /.Ita No.98/Rjt/2021 "नधा"रणवष"/ Assessment Year: 2015-16 M/S. Parisharam Builders The Pr. Commissioner Of बनाम Krunal Complex, Income Tax, Rajkot-1, 1St Floor, Junagadh Road, Veraval Vs. Rajkot Gujarat-362266 Pan : Aacfp5403G (अपीलाथ"/Appellant) (""यथ"/Respondent) :

For Appellant: Shri Mehul Ranpura, ld.ARFor Respondent: Shri Sanjay Punglia, CIT-DR

Section 143(3)Section 263Section 40A(2)(b)

amount paid to related persons u/s 40A(2)(b) of the Act reported in Audit Report and ITR and to verify large increase in sundry creditors with respect to turnover, as compared to preceding year etc. On perusal of the case records, it was noticed by the learned PCIT that ... during the assessment proceedings, the assessing officer had called for details of all outstanding sundry creditors with their complete address and PAN above Rs. 1 M/s. Parisharam Builders ITA No.98 /RJT/2021 (AY : 2015-16) 3 Lakh, along with detail of purchase made due to which such sundry creditors arise

Shri Barfani Dadaji Buildcon, Ahmedabad vs. The ITO, Ward-4(2)(5), Ahmedabad

In the result, the appeal of the assessee is allowed

ITA 1024/AHD/2025[2017-18]Status: DisposedITAT Ahmedabad29 Sept 2025AY 2017-18

Bench: Shri Siddhartha Nautiyal & Shri Makarand V.Mahadeokarasstt.Year : 2017-18 Shri Barfani Dadaji Buildcon Vs. Ito, Ward-4(2)(5) Survey No.1-3-4, Hl Patel House Ahmedabad. Nr.Mahakali Mandir Mouje, Bhada Ahmedabad 380 060. Pan : Acpfs 7840 D

For Appellant: Shri Sanjay R. Shah, CA

Section 133(6)Section 143(3)Section 271ASection 69C

compared to the total income declared. 2.2 During the course of assessment proceedings, the Assessing Officer noted that the assessee had disclosed certain sundry creditors in its books of account. In order to verify the genuineness and correctness of such creditors, the assessee was called upon to furnish names, addresses ... submissions and obtaining a remand report from the Assessing Officer, proceeded to adjudicate the matter. The assessee reiterated that the differences in balances with sundry creditors were either on account of rate disputes or timing differences in accounting and could not be construed as unexplained purchases. Reliance was placed

Joint Commissioner of Income Tax, Subhash Road Dehadun vs. M/S Times Square, Sahastradhara Road

Appeal of the Revenue is dismissed

ITA 42/DDN/2025[2017-18]Status: DisposedITAT Dehradun26 Sept 2025AY 2017-18

Bench: Shri Yogesh Kumar U.S & Shri Manish Agarwal

Section 143(3)Section 250Section 43CSection 69A

ITA No.42/DDN/2025 IN THE INCOME TAX APPELLATE TRIBUNAL DEHRADUN “DB” BENCH: DEHRADUN BEFORE SHRI YOGESH KUMAR U.S, JUDICIAL MEMBER & SHRI

The Deputy Commissioner of Income Tax, Central Circle, Dehradun vs. M/S. Sharda Exports, Haridwar

In the result, appeal of the Assessee in ITA No

ITA 45/DDN/2022[2007-08]Status: DisposedITAT Dehradun26 Sept 2025AY 2007-08

Bench: Shri Yogesh Kumar U.S. & Shri Manish Agarwal

Section 139Section 143Section 143(1)Section 143(2)Section 143(3)Section 147Section 148

firm, copy of the ledger accounts of all the items appearing on liabilities and assets side of balance sheet along with the confirmation of sundry creditors having balance of Rs. 1 lac or more as on 31.03.2005 and confirmation of loans and advances having balance of Rs. 1 lakh