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“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
76
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
55
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
47
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
47
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
43
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
40
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
39
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
38
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

Dy.Commissioner of Income Tax, CC-2, Kanpur vs. Shri.Mohammad Asfand Akhtar, Kanpur

In the result, the appeal of Revenue in ITA

ITA 144/LKW/2022[2018-19]Status: DisposedITAT Lucknow26 Sept 2025AY 2018-19

Bench: Shri Sudhanshu Srivastava & Shri Anadee Nath Misshraassessment Year: 2018-19 Dcit, Cc-2 V. Shri Mohammad Asfand Laxmi Niwas, 10/503, Akhtar Allenganj, Kanpur-208001. Plot No.02, Block-B, Scheme-39, Ram Rai Ki Sarai, Jajmau, Kanpur Nagar-208010. Tan/Pan: Aempa0823R (Appellant) (Respondent) Assessment Year: 2018-19 Shri Mohammad Asfand Akhtar V. Dcit, Central Circle-Ii Plot No.02, Block-B, Scheme-39, 10/503, Allenganj, Kanpur- Ram Rai Ki Sarai, Jajmau, 208001. Kanpur Nagar-208010. Tan/Pan: Aempa0823R (Appellant) (Respondent) Appellant By: Shri Ashish Jaiswal, Advocate Respondent By: Shri R. K. Agarwal, Cit(Dr) O R D E R

For Appellant: Shri Ashish Jaiswal, AdvocateFor Respondent: Shri R. K. Agarwal, CIT(DR)
Section 143(3)Section 36(1)(va)Section 37Section 41Section 41(1)Section 68Section 69C

Kanpur has erred in law and on facts of the case in deleting the addition of Rs.13,17,96,017/- of bogus sundry creditors surrendered u/s 41 of the Act without appreciating the facts brought on record and that the assessee has himself admitted that the sundry creditors were bogus ... survey was conducted u/s 133A of the IT Act, 1961 on 22.09.2017 and the assessee was made to surrender of unsecured loans and sundry creditors vide statement recorded by the DCIT-1, Kanpur under coercion, consequent to survey, the assessee filed affidavit dated 28.09.2017 before the DCIT-1, Kanpur. Subsequently

Mohd. Asfand Akhtar, Kanpur vs. Deputi Commissioner of Income Tax CC-2, Kanpur

In the result, the appeal of Revenue in ITA

ITA 139/LKW/2022[2018-19]Status: DisposedITAT Lucknow26 Sept 2025AY 2018-19

Bench: Shri Sudhanshu Srivastava & Shri Anadee Nath Misshraassessment Year: 2018-19 Dcit, Cc-2 V. Shri Mohammad Asfand Laxmi Niwas, 10/503, Akhtar Allenganj, Kanpur-208001. Plot No.02, Block-B, Scheme-39, Ram Rai Ki Sarai, Jajmau, Kanpur Nagar-208010. Tan/Pan: Aempa0823R (Appellant) (Respondent) Assessment Year: 2018-19 Shri Mohammad Asfand Akhtar V. Dcit, Central Circle-Ii Plot No.02, Block-B, Scheme-39, 10/503, Allenganj, Kanpur- Ram Rai Ki Sarai, Jajmau, 208001. Kanpur Nagar-208010. Tan/Pan: Aempa0823R (Appellant) (Respondent) Appellant By: Shri Ashish Jaiswal, Advocate Respondent By: Shri R. K. Agarwal, Cit(Dr) O R D E R

For Appellant: Shri Ashish Jaiswal, AdvocateFor Respondent: Shri R. K. Agarwal, CIT(DR)
Section 143(3)Section 36(1)(va)Section 37Section 41Section 41(1)Section 68Section 69C

Kanpur has erred in law and on facts of the case in deleting the addition of Rs.13,17,96,017/- of bogus sundry creditors surrendered u/s 41 of the Act without appreciating the facts brought on record and that the assessee has himself admitted that the sundry creditors were bogus ... survey was conducted u/s 133A of the IT Act, 1961 on 22.09.2017 and the assessee was made to surrender of unsecured loans and sundry creditors vide statement recorded by the DCIT-1, Kanpur under coercion, consequent to survey, the assessee filed affidavit dated 28.09.2017 before the DCIT-1, Kanpur. Subsequently

Saket Agarwal, Delhi vs. Income Tax Officer, Ward -45(2), Delhi

In the result, appeal of the assessee is partly allowed

ITA 6116/DEL/2024[2017-18]Status: DisposedITAT Delhi24 Sept 2025AY 2017-18

Bench: Shri Anubhav Sharma & Shri Manish Agarwal[Assessment Year : 2017-18] Shri Saket Agrawal, Vs Ito, 392/1, 2Nd Floor, Ward-45(2), Sainik Vihar, Pitam Pura, Delhi Delhi-110085. Pan-Aavpa3410D Appellant Respondent Appellant By Dr. Rakesh Gupta, Adv., Shri Somil Aggarwal, Adv. & Shri Saksham Aggarwal, Ca Respondent By Shri Narpat Singh, Sr. Dr Date Of Hearing 26.06.2025 Date Of Pronouncement 24.09.2025 Order Per Manish Agarwal, Am : The Present Appeal Is Filed By Assessee Against The Order Dated 10.12.2024 Passed By Ld. Commissioner Of Income Tax (A), National Faceless Appeal Centre (“Nfac”), Delhi [“Ld. Cit(A)”] In Appeal No. Cit(A), Delhi-15/10489/2019-20 U/S 250 Of The Income Tax Act,1961 [“The Act”] Arising Out Of Assessment Order Dated 31.12.2019 Passed U/S 143(3) Of The Act Pertaining To Assessment Year 2017-18. 2. Brief Facts Of The Case Are That Assessee Is An Individual & Filed His Return Of Income On 26.03.2018, Declaring Total Income Of Inr 10,02,940/-. The Case Of The Assessee Was Selected For Complete Scrutiny For The Reason That Assessee Has Deposited Cash In Specified Bank Notes (Sbn) During Demonetization & Due To The Survey Carried Out At The Business Premises Of The Assessee.

Section 115BSection 143(3)Section 250Section 68Section 69C

r.w.s. 115BBE of the Act. 5. Besides this, AO observed that in the trial balance of M/s. Prerna Impex, total credit under the head “sundry creditors” were of INR 5,62,62,496/- whereas purchases made were only INR 2,91,33,259/-. He, therefore, treated the remaining balance ... facts in confirming the action of Ld. AO in making addition of Rs.2,71,29,237/- on account of alleged difference of sundry creditors and purchases by treating it as alleged income of assessee u/s 68 and taxing the same u/s 115BBE and that too by recording incorrect facts

Donyi Polo Timberes Pvt. Ltd., New Delhi vs. ITO Ward-7(4), Delhi

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

ITA 1049/DEL/2024[2014-15]Status: DisposedITAT Delhi22 Sept 2025AY 2014-15

Bench: Shri Satbeer Singh Godara & Shris.Rifaur Rahmandonyi Polo Timbers Pvt. Ltd., Vs. Ito, Ward 7(4), D-3, B-1, Basement Central Market, Delhi. Prashant Vihar, New Delhi – 110 085. (Pan :Aabcd4162C) (Appellant) (Respondent) Assessee By : Ms. Mansi Jain, Ca Ms. Sakshi Rustagi, Advocate Revenue By : Shri Rajesh Kumar Dhanesta, Sr. Dr Date Of Hearing : 23.06.2025 Date Of Order : 22.09.2025 Order Per S. Rifaur Rahman: 1. The Assessee Has Filed Appeal Against The Order Of The Learned Commissioner Of Income Tax (Appeals)/National Faceless Appeal Centre (Nfac), Delhi [“Ld. Cit(A)”, For Short] Dated 10.01.2024 For The Assessment Year 2014-15 2. Brief Facts Of The Case Are, Original Assessment Under Section 143(3) Of The Income-Tax Act, 1961 Was Passed On 27.09.2016. The Abovesaid Order Was Reviewed By The Ld. Pcit-3, New Delhi. It Was Noticed That The Assessee Had Debited Exchange Fluctuation Loss Of Rs.1,19,56,753/- In Its Profit & Loss

For Appellant: Ms. Mansi Jain, CAFor Respondent: Shri Rajesh Kumar Dhanesta, Sr. DR
Section 143(3)Section 263

well as in AY 2013-14. It was also observed that during the original assessment proceedings, assessee submitted that the sundry creditors were outstanding in respect of goods imported by the assessee during the preceding FY but no purchase was made during FY 2012-13 and 2013-14. In view ... Rs.44.74 Add : Difference in Foreign Exchange 398002 Closing Balance as on 31.03.2014 26231.84 1571680 @ Rs.59.914 3. Grand Total of Sundry Creditors as on 785297.22 35094329 31.03.2013 (as per audited Balance Sheet) 4. Grand Total of Sundry Creditors as on 785297.22 47051081 31.03.2014 (as per audited Balance sheet) 5. Foreign Exchange