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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

Dashrath Kumar Sharma, Jpr, Jaipur vs. ITO WD 7(4), Jpr, Jaipur

ITA 647/JPR/2024[2014-15]Status: DisposedITAT Jaipur17 Mar 2025AY 2014-15

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI, AM आयकर अपील सं./ITA No. 647/JP/2024 निर्धारण वर्ष / Assessment Year : 2014-15 Shri Dashrath Kumar Sharma 73, Pancholiya Ka Mohalla, Kanota, Jaipur – 303 012 बनाम The ITO Vs. Ward 7(4) Jaipur प्रत्यर्थी / Respondent स्थायी लेखा सं./ जीआईआर सं./PAN/GIR No.: EAJPS 0594A अपीलार्थी / Appellant निर्धारिती की ओर से / Assessee by : Shri Mahendra Gargieya, Advocate & राजस्व की ओर से / Revenue by Shri Hemang Gargieya, Advocate :

For Appellant: Shri Mahendra Gargieya, Advocate &For Respondent: Shri Arvind Kumar, CIT-DR
Section 139(1)Section 143(2)Section 143(3)Section 234ASection 56(2)(vii)Section 68

from his father, unsecured loan of Rs. 18,00,000/-, secured loan of Rs. 6,72,987/- capital of Rs. 47,56,456/- and sundry creditors of Rs. 10,00,000/-. 3.2 Looking to the discrepancies and huge additions in the assets, proposal for conservation of the case from limited ... capital 2,56,03,0777 3 Addition on account of business income 17,24,000 4 Unexplained unsecure loan 18,00,000 5 Unexplained sundry creditors 10,00,000 6 Addition as per provision of section 56(2)(vii)(b)(ii) of the Act 15,32,337 7 Income from

Duraisamy Suguna, Vellore vs. ACIT, Cirlce-1, Vellore

ITA 3137/CHNY/2024[2017-18]Status: DisposedITAT Chennai11 Mar 2025AY 2017-18

Bench: Shri George George K, Hon’Ble & Shri S.R. Raghunatha, Hon’Bleआयकर अपील सं./Ita No.: 3137/Chny/2024 ननिाजरण वर्ज / Assessment Year: 2017-18 Duraisamy Suguna, The Asst Commissioner Of 30 Thellur Road, V. Income Tax, Sai Nagar, Circle -1, Vellore – 632 010. Vellore. [Pan: Dsxps-6094-C] (अपीलाथी/Appellant) (प्रत्यथी/Respondent) अपीलाथी की ओर से/Appellant By : Mr. M. Karunakaran, Advocate प्रत्यथी की ओर से/Respondent By : Ms. Gouthami Manivasagam, Jcit सुनवाई की तारीख/Date Of Hearing : 26.02.2025 घोर्णा की तारीख/Date Of Pronouncement : 11.03.2025

For Appellant: Mr. M. Karunakaran, AdvocateFor Respondent: Ms. Gouthami Manivasagam, JCIT
Section 143(2)Section 69A

which Rs.7,50,000/- was by cheque on 18/09/2016 and balance sum of Rs. 6,50,000 was drawn by cash. 4. The sundry creditors were not paid during the year to the tune of Rs.16,00,175/- and hence the cash sales were to be treated as available cash ... Page 5 of 16 ITA. No: 3137/Chny/2024 acceptable, since the same was prepared without any supporting document. In the scenario the payments due to sundry creditor are not acceptable. Further, the assessee claims that she received rental advance from tenant. But no rental agreement has been produced and the details

Kandla Export Corporation, Gandhidham vs. The Dy. Commr. of Income Tax, Cen. Cir.-2(3), Ahmedabad

In the result, the summaries and concise ground No

ITA 155/RJT/2016[2012-13]Status: DisposedITAT Rajkot28 Feb 2025AY 2012-13

Bench: Dr. Arjun Lal Saini, Am.& Dinesh Mohan Sinha, Jm आयकरअपीलसं./It(Ss)A No.135/Ahd/2016 ("नधा"रणवष" / Assessment Year: (2011-12) (Hybrid Hearing) The Deputy Commissioner Of Vs. Kandla Exports Corporation Income – Tax, Central Circle – 2(3), Plot No. 18, Maitri Bhavan, 3Rd Floor, A – 305, Aayakar Bhavan, Sector – 8, Gandhidham, Ahmedabad – 370201 Kutch- 370201 "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Aacfk1906F (Assessee) (Respondent) आयकरअपीलसं./It(Ss)A No.136/Ahd/2016 ("नधा"रणवष" / Assessment Year: (2012-13) (Hybrid Hearing) The Deputy Commissioner Of Kandla Exports Corporation Vs Income – Tax, Central Circle – Plot No. 18, Maitri Bhavan, . 2(3), 3Rd Floor, A – 305, Aayakar Sector – 8, Gandhidham, Bhavan, Ahmedabad - 370201 Kutch- 370201 "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Aacfk1906F (Assessee) (Respondent)

file of the assessing officer for fresh adjudication. The ld. DR further stated that in the above chart, the assessee has used the sundry creditors, as a source of funds, which is not acceptable because the assessee purchases the goods from the sundry creditors, which forms part of the stock ... assessee, hance, no interest free funds available from sundry creditors, therefore, these sundry creditors should not be part of the interest free funds. Therefore, ld. DR contended that since the assessee has mislead the figures, therefore, addition made by the assessing officer may be sustained. 20. On the other hand

Kelley Steel Corporation, Mandi Gobindgarh vs. ITO, Ward-2, Mandi Gobindgarh

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

ITA 869/CHANDI/2024[2021-22]Status: DisposedITAT Chandigarh28 Feb 2025AY 2021-22

Bench: Shri Vikram Singh Yadav & Shri Paresh M. Joshiआयकर अपील सं./ Ita No. 869/Chd/2024 "नधा"रण वष" / Assessment Year: 2021-22 Kelly Steel Corporation, Vs. The Ito, बनाम 1, Gt Road, Ward-2, Mandi Gobindgarh Mandi Gobindgarh 147301 "थायी लेखा सं./Pan No: Aabfk1479L अपीलाथ"/ Appellant ""यथ"/ Repsondent ( Hybrid Hearing ) "नधा"रती क" ओर से/Assessee By : Shri Parkishit Aggarwal, Ca राज"व क" ओर से/ Revenue By : Shri Rohit Sharma, Cit Dr सुनवाई क" तार"ख/Date Of Hearing : 30.01.2025 उदघोषणा क" तार"ख/Date Of Pronouncement : 28.02.2025 आदेश/Order Per Paresh M. Joshi, Jm :

For Appellant: Shri Parkishit Aggarwal, CAFor Respondent: Shri Rohit Sharma, CIT DR
Section 142(1)Section 143(1)(a)Section 143(2)Section 143(3)Section 246ASection 253

from Rs. 31,71,080/-in AY 2020-21 to Rs. 34,21,080/- in AY 2021-22 iii. Increase in Sundry creditors under current liabilities of Rs. 5,17,11,652/- from ... capital 4 Add: Unexplained increase in 2,50,000 unsecured loans(others) 5 Add: Unexplained increase in 5,17,11,652 Sundry Creditors 6 Add: Disallowance of purchases 8,92,06,746 7 Add: Disallowance of excess 47,01,597 opening stock 8 Total income/loss determined

ITO., Ward -6(1), Hyderabad vs. Sidhi Jewellers, Hyderabad

In the result, the appeal filed by the assessee and the appeal filed by the Revenue are dismissed

ITA 755/HYD/2024[2017-18]Status: DisposedITAT Hyderabad25 Feb 2025AY 2017-18

Bench: Shri Laliet Kumar, Hon’Ble & Shri G. Manjunatha, Hon’Bleआ.अपी.सं / Ita No.729 & 755/Hyd/2024 (निर्धारण वर्ा / Assessment Years: 2015-16 & 2017-18) The Income Tax Officer, Vs. Sidhi Jewellers, Ward 6(1), Hyderabad. Hyderabad.. Pan No.Aagfs4330P. अपीलार्थी / Appellant प्रत्‍यर्थी / Respondent आ.अपी.सं / Ita Nos.750 & 751/Hyd/2024 (निर्धारण वर्ा / Assessment Years: 2015-16 & 2017-18) Sidhi Jewellers, Vs. The Income Tax Officer, Hyderabad. Ward 6(1), Hyderabad. Pan No.Aagfs4330P. अपीलार्थी / Appellant प्रत्‍यर्थी / Respondent निर्धाररती द्वधरध/Assessee By: Shri S. Ramarao, Advocate. रधजस्‍व द्वधरध/Revenue By: Shri B. Bala Krishna, Cit-Dr.

For Appellant: Shri S. Ramarao, AdvocateFor Respondent: Shri B. Bala Krishna, CIT-DR
Section 148Section 148A

source for cash deposits cannot be accepted. Therefore, taking into account relevant financial results, including total sales declared by the assessee, sundry debtors and sundry creditors, has worked out total cash available at Rs. 2.12 crores and after considering relevant explanation, made addition of Rs. 5,90,035,000/- under ... assessee further contended that the AO is erred in working out the availability of cash in hand by considering only the amount of sundry creditors, even though, the sundry debtors is not out of sales, but on account of transfer between partnership firm and the proprietary firm and the assessee

Sidhi Jewellers, Hyderabad vs. ITO., Ward-6(1), Hyderabad

In the result, the appeal filed by the assessee and the appeal filed by the Revenue are dismissed

ITA 751/HYD/2024[2017-18]Status: DisposedITAT Hyderabad25 Feb 2025AY 2017-18

Bench: Shri Laliet Kumar, Hon’Ble & Shri G. Manjunatha, Hon’Bleआ.अपी.सं / Ita No.729 & 755/Hyd/2024 (निर्धारण वर्ा / Assessment Years: 2015-16 & 2017-18) The Income Tax Officer, Vs. Sidhi Jewellers, Ward 6(1), Hyderabad. Hyderabad.. Pan No.Aagfs4330P. अपीलार्थी / Appellant प्रत्‍यर्थी / Respondent आ.अपी.सं / Ita Nos.750 & 751/Hyd/2024 (निर्धारण वर्ा / Assessment Years: 2015-16 & 2017-18) Sidhi Jewellers, Vs. The Income Tax Officer, Hyderabad. Ward 6(1), Hyderabad. Pan No.Aagfs4330P. अपीलार्थी / Appellant प्रत्‍यर्थी / Respondent निर्धाररती द्वधरध/Assessee By: Shri S. Ramarao, Advocate. रधजस्‍व द्वधरध/Revenue By: Shri B. Bala Krishna, Cit-Dr.

For Appellant: Shri S. Ramarao, AdvocateFor Respondent: Shri B. Bala Krishna, CIT-DR
Section 148Section 148A

source for cash deposits cannot be accepted. Therefore, taking into account relevant financial results, including total sales declared by the assessee, sundry debtors and sundry creditors, has worked out total cash available at Rs. 2.12 crores and after considering relevant explanation, made addition of Rs. 5,90,035,000/- under ... assessee further contended that the AO is erred in working out the availability of cash in hand by considering only the amount of sundry creditors, even though, the sundry debtors is not out of sales, but on account of transfer between partnership firm and the proprietary firm and the assessee

Sidhi Jewellers, Hyderabad vs. ITO., Ward-6(1), Hyderabad

In the result, the appeal filed by the assessee and the appeal filed by the Revenue are dismissed

ITA 750/HYD/2024[2015-16]Status: DisposedITAT Hyderabad25 Feb 2025AY 2015-16

Bench: Shri Laliet Kumar, Hon’Ble & Shri G. Manjunatha, Hon’Bleआ.अपी.सं / Ita No.729 & 755/Hyd/2024 (निर्धारण वर्ा / Assessment Years: 2015-16 & 2017-18) The Income Tax Officer, Vs. Sidhi Jewellers, Ward 6(1), Hyderabad. Hyderabad.. Pan No.Aagfs4330P. अपीलार्थी / Appellant प्रत्‍यर्थी / Respondent आ.अपी.सं / Ita Nos.750 & 751/Hyd/2024 (निर्धारण वर्ा / Assessment Years: 2015-16 & 2017-18) Sidhi Jewellers, Vs. The Income Tax Officer, Hyderabad. Ward 6(1), Hyderabad. Pan No.Aagfs4330P. अपीलार्थी / Appellant प्रत्‍यर्थी / Respondent निर्धाररती द्वधरध/Assessee By: Shri S. Ramarao, Advocate. रधजस्‍व द्वधरध/Revenue By: Shri B. Bala Krishna, Cit-Dr.

For Appellant: Shri S. Ramarao, AdvocateFor Respondent: Shri B. Bala Krishna, CIT-DR
Section 148Section 148A

source for cash deposits cannot be accepted. Therefore, taking into account relevant financial results, including total sales declared by the assessee, sundry debtors and sundry creditors, has worked out total cash available at Rs. 2.12 crores and after considering relevant explanation, made addition of Rs. 5,90,035,000/- under ... assessee further contended that the AO is erred in working out the availability of cash in hand by considering only the amount of sundry creditors, even though, the sundry debtors is not out of sales, but on account of transfer between partnership firm and the proprietary firm and the assessee