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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

ACIT 1, Gwalior vs. Pankaj Advertising Pvt Ltd, Gwalior

The appeal stand dismissed

ITA 29/AGR/2020[2013-14]Status: DisposedITAT Agra23 Apr 2025AY 2013-14

Bench: Hon’Ble Shri Satbeer Singh Godara, Jm & Hon’Ble Shri Manoj Kumar Aggarwal, Am 1. आयकरअपील सं. / Ita No.28/Agr/2020 (िनधा"रणवष" / Assessment Year: 2010-11) & 2. आयकरअपील सं. / Ita No.29/Agr/2020 (िनधा"रणवष" / Assessment Year: 2013-14) Acit, Circle-1, M/S. Pankaj Advertising Pvt. Ltd. बनाम/ Gwalior. Parakh Home, Bachchraj Ka Bada, Vs. Sarafa Bazar, Lashkar, Gwalior. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaccm-2597-D (अपीलाथ"/Appellant) : (""थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Sh. Shailender Shrivastava, - Ld. Sr. Dr ""थ"कीओरसे/Respondent By : Sh. Mahesh Agarwal, Ca – Ld. Ar सुनवाईकीतारीख/Date Of Hearing : 21-02-2025 घोषणाकीतारीख /Date Of Pronouncement : 23-04-2025 आदेश / O R D E R Manoj Kumar Aggarwal () 1. Aforesaid Appeals By Revenue For Assessment Years (Ay) 2010-11 & 2013-14 Arise Out Of Separate Orders Of First Appellate Authority. First, We Take Up Appeal For Ay 2010-11 Which Arises Out Of An Order Passed By Learned Commissioner Of Income Tax (Appeals), Gwalior [Cit(A)] On 26- 11-2019 In The Matter Of An Assessment Framed By Ld. Assessing Officer [Ao] U/S. 143(3) Of The Act On 28-03-2013. Having Heard Rival Submissions, The Appeal Is Disposed-Off As Under. 2. In The Assessment Order, Ld. Ao Observed That There Was Difference In Sundry Creditor Balances For Rs.232.04 Lacs Which Is Tabulated On Page No.4 Of The Assessment Order. The Same Was Added To The Income

For Appellant: Sh. Shailender Shrivastava, - Ld. Sr. DRFor Respondent: Sh. Mahesh Agarwal, CA – Ld. AR
Section 143(3)Section 41(1)Section 68

Having heard rival submissions, the appeal is disposed-off as under. 2. In the assessment order, Ld. AO observed that there was difference in sundry creditor balances for Rs.232.04 Lacs which is tabulated on Page No.4 of the assessment order. The same was added to the income of the assessee ... Lacs was there in the opening balance and therefore, the same could not be added in this year. Another finding was that difference in sundry creditors was offered to tax u/s 41(1) in subsequent years. The Ld. CIT(A) rendered factual finding with respect to each of the entity

ACIT Circle-1, Gwalior vs. Pankaj Advertising Pvt Ltd, Gwalior

The appeal stand dismissed

ITA 28/AGR/2020[2010-11]Status: DisposedITAT Agra23 Apr 2025AY 2010-11

Bench: Hon’Ble Shri Satbeer Singh Godara, Jm & Hon’Ble Shri Manoj Kumar Aggarwal, Am 1. आयकरअपील सं. / Ita No.28/Agr/2020 (िनधा"रणवष" / Assessment Year: 2010-11) & 2. आयकरअपील सं. / Ita No.29/Agr/2020 (िनधा"रणवष" / Assessment Year: 2013-14) Acit, Circle-1, M/S. Pankaj Advertising Pvt. Ltd. बनाम/ Gwalior. Parakh Home, Bachchraj Ka Bada, Vs. Sarafa Bazar, Lashkar, Gwalior. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaccm-2597-D (अपीलाथ"/Appellant) : (""थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Sh. Shailender Shrivastava, - Ld. Sr. Dr ""थ"कीओरसे/Respondent By : Sh. Mahesh Agarwal, Ca – Ld. Ar सुनवाईकीतारीख/Date Of Hearing : 21-02-2025 घोषणाकीतारीख /Date Of Pronouncement : 23-04-2025 आदेश / O R D E R Manoj Kumar Aggarwal () 1. Aforesaid Appeals By Revenue For Assessment Years (Ay) 2010-11 & 2013-14 Arise Out Of Separate Orders Of First Appellate Authority. First, We Take Up Appeal For Ay 2010-11 Which Arises Out Of An Order Passed By Learned Commissioner Of Income Tax (Appeals), Gwalior [Cit(A)] On 26- 11-2019 In The Matter Of An Assessment Framed By Ld. Assessing Officer [Ao] U/S. 143(3) Of The Act On 28-03-2013. Having Heard Rival Submissions, The Appeal Is Disposed-Off As Under. 2. In The Assessment Order, Ld. Ao Observed That There Was Difference In Sundry Creditor Balances For Rs.232.04 Lacs Which Is Tabulated On Page No.4 Of The Assessment Order. The Same Was Added To The Income

For Appellant: Sh. Shailender Shrivastava, - Ld. Sr. DRFor Respondent: Sh. Mahesh Agarwal, CA – Ld. AR
Section 143(3)Section 41(1)Section 68

Having heard rival submissions, the appeal is disposed-off as under. 2. In the assessment order, Ld. AO observed that there was difference in sundry creditor balances for Rs.232.04 Lacs which is tabulated on Page No.4 of the assessment order. The same was added to the income of the assessee ... Lacs was there in the opening balance and therefore, the same could not be added in this year. Another finding was that difference in sundry creditors was offered to tax u/s 41(1) in subsequent years. The Ld. CIT(A) rendered factual finding with respect to each of the entity

M/S R.R.D.Developers, Gwlior vs. Pr.CIT., Gwalior

The appeal stand allowed in terms of our above order

ITA 320/AGR/2018[2013-14]Status: DisposedITAT Agra23 Apr 2025AY 2013-14

Bench: Hon’Ble Shri Satbeer Singh Godara, Jm & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकरअपील सं. / Ita No. 320/Agr/2018 (िनधा"रणवष" / Assessment Year:2013-14) M/S R.R.D. Developers Pr. Cit बनाम/ Kedarpur, In Front Of Tata Gwalior. Showroom, Shivpuri Link Vs. Road, Gwalior. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aamfr-5438-F (अपीलाथ"/Appellant) : (""थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : None ""थ"कीओरसे/Respondent By : Sh. Sukesh Kumar Jain – Ld. Cit/Dr सुनवाईकीतारीख/Date Of Hearing : 21-02-2025 घोषणाकीतारीख /Date Of Pronouncement : 23-04-2025 आदेश / O R D E R Manoj Kumar Aggarwal () 1. By Way Of This Appeal, The Assessee Assails Invocation Of Revisionary Jurisdiction U/S 263 By Ld. Pr. Commissioner Of Income Tax, Gwalior (Pr.Cit) For Assessment Year (Ay) 2013-14 In The Matter Of An Assessment Framed By Ld. Ao U/S 143(3) Of The Act On 17-03-2016. At The Time Of Hearing, None Appeared For Assessee. Accordingly, The Appeal Was Proceeded With The Able Assistance Of Ld. Cit-Dr Who Supported The Revision Of The Order. 2. Upon Perusal Of Assessment Order, It Could Be Seen That The Assessee’S Return Of Income Was Scrutinized & During The Course Of Assessment Proceedings, Notices U/S 142(1) Were Issued From Time To Time Which Were Duly Been Responded To By The Assessee. Accepting

For Appellant: NoneFor Respondent: Sh. Sukesh Kumar Jain – Ld. CIT/DR
Section 131Section 133(6)Section 142(1)Section 143(3)Section 263Section 68

stated that the details of depositors were duly submitted by the assessee. The amount was received from customers and the same were not sundry creditors. The provisions of Sec.68 would not apply in such a case. On the issue of expenses, it was submitted that all the expenditure was capitalized

Sanjay Sharma, Gwalior vs. ITO 3(2), Gwalior, Ayaker Bhavan City Centre

The appeal stand allowed for statistical purposes

ITA 25/AGR/2024[2014-15]Status: DisposedITAT Agra22 Apr 2025AY 2014-15

Bench: Hon’Ble Shri Satbeer Singh Godara, Jm & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकरअपीलसं./ Ita No. 25/Agr/2024 (िनधा"रणवष" / Assessment Year:2014-15) Shri Sanjay Sharma Income-Tax Officer, बनाम/ 51, Pg Enclave, Patel Nagar, Ward 3(2), Gwalior. Vs. City Centre, Gwalior (Mp). "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aubps-3595-D (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Sh. S.C. Jain, Ca – Ld. Ar " थ"कीओरसे/Respondent By : Sh. Shailender Shrivastava – Ld. Sr. Dr सुनवाईकीतारीख/Date Of Hearing : 20-02-2025 घोषणाकीतारीख /Date Of Pronouncement : 22.04.2025 आदेश / O R D E R Manoj Kumar Aggarwal () 1. Aforesaid Appeal By Assessee For Assessment Year (Ay) 2014-15 Arises Out Of An Order Passed By Learned Commissioner Of Income Tax (Appeals), Nfac, Delhi [Cit(A)] On 21-11-2023 In The Matter Of An Assessment Framed By Ld. Assessing Officer [Ao] U/S. 143(3) Of The Act On 28-12-2016. The Assessee Provides Services Of Supervision & Quality Control. In The Assessment Order, Ld. Ao Assessed Total Income At Rs.45.48 Lacs After Various Additions / Disallowances. The Ld. Cit(A) Confirmed The Assessment Against Which The Assessee Is In Further Appeal Before Us. The Grievance Of The Assessee Is – (I) Addition Of Unaccounted Expenditure For Rs.20.88 Lacs; (Ii) Addition Of Sundry Creditors U/S 68 For Rs.13.50 Lacs; (Iii) Addition U/S 56(2) For Rs.1.43 Lacs. It Could Also Be Seen That The Assessee Has Not Made Any Representation During First

For Appellant: Sh. S.C. Jain, CA – Ld. ARFor Respondent: Sh. Shailender Shrivastava – Ld. Sr. DR
Section 143(3)Section 56(2)Section 68

assessee is in further appeal before us. The grievance of the assessee is – (i) Addition of Unaccounted expenditure for Rs.20.88 Lacs; (ii) Addition of Sundry Creditors u/s 68 for Rs.13.50 Lacs; (iii) Addition u/s 56(2) for Rs.1.43 Lacs. It could also be seen that the assessee has not made ... stated that assessee’s books were duly audited and there was no unaccounted expenditure. The assessee has shown progressive results. On the issue of sundry creditors, it has been stated that these are mere provisions for rent which has been repaid in subsequent years. On the invocation

Shri Ramesh Singh Rana, Lucknow vs. Deputy Commissioner of Income Tax-4, Lucknow

In the result, the appeal of the assessee is dismissed

ITA 576/LKW/2019[2012-13]Status: HeardITAT Lucknow17 Apr 2025AY 2012-13

Bench: Shri Kul Bharat & Shri Anadee Nath Misshraआयकर अपील सं/ Ita No.576/Lkw/2019 "नधा"रण वष"/ Assessment Year: 2012-13 Shri Ramesh Singh Rana V. Dcit Range-4 3-B, Talkatora Road, Rajaji 5-Ashok Marg, Aaykar Puram, Lucknow-226017. Bhawan, Lucknow- 226001. Pan:Aggpr0749B अपीलाथ"/(Appellant) ""यथ"/(Respondent) अपीलाथ" "क और से/Appellant By: None ""यथ" "क और से /Respondent By: Shri Sanjeev Krishna Sharma, Addl. Cit(Dr) सुनवाई "क तार"ख / Date Of Hearing: 08 04 2025 घोषणा "क तार"ख/ Date Of 17 04 2025 Pronouncement: आदेश / O R D E R Per Anadee Nath Misshra, A.M.: This Appeal Filed By The Assessee, Is Directed Against The Order Of The Learned Commissioner Of Income-Tax (Appeals)-2, Lucknow Dated 11.06.2019, Pertaining To The Assessment Year 2012-13. The Assessee Has Raised The Following Grounds Of Appeal: -

For Appellant: NoneFor Respondent: Shri Sanjeev Krishna Sharma, Addl
Section 133(3)Section 133(6)Section 143(3)Section 145(3)

under: - “6.3 The gist of additions/disallowances made by the AO is as under: a. The AO issued notices u/s 133(6) to 7 sundry creditors whose addresses were provided by the appellant. However no reply was received. Thus, the AO concluded that purchases and expenses are unverified ... allowed. 91 Ground of appeal no. 1 - Addition of Rs.31,52,002 -: a. The AO issued notices u/s 133(6) to 7 sundry creditors whose addresses were provided by the appellant. However no reply was received. Thus, the AO concluded that purchases and expenses are unverified. b. The AO noted