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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

Sri Varalaxmi Projects Private Limited, Hyderabad vs. ITO., Ward-3(1), Hyderabad

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

ITA 486/HYD/2024[2015-16]Status: DisposedITAT Hyderabad23 Sept 2024AY 2015-16

Bench: Shri Manjunatha G, Accountnat Member & Shri Prakash Chand Yadavआ.अपी.सं /Ita No.486/Hyd/2024 (निर्धारण वर्ा/Assessment Year:2015-16) M/S. Sri Varalaxmi Projects Private Income Tax Officer, Vs. Ward-3(1), Hyderabad. Limited, Hyderabad. Pan: Aaics9161K (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee By: Shri S. Venkateswarlu, Advocate रधजस् व द्वधरध/Revenue By:: Shri B. Bala Krishna, Cit-Dr सुिवधई की तधरीख/Date Of Hearing: 12/09/2024 घोर्णध की तधरीख/Pronouncement: 23/09/2024

For Appellant: Shri S. Venkateswarlu, AdvocateFor Respondent: : Shri B. Bala Krishna, CIT-DR
Section 142(1)Section 143(1)Section 148Section 263

behind the reopening of the assessee's case is that there was an information against the assessee revealing that the assessee has been inflated sundry creditors in his books of account and syphoning of the profits into the personal account of the Directors. In response to the notices issued ... notice dated 15.3.2022 issued u/s.142(1) of the Act has asked the assessee the following: - “a. Please provide source of payments made to the sundry creditors during the year under consideration along with supporting documentary evidences. b. Please provide copy of ledgers of the shareholders in the books of accounts

Malipeddi Giridhar, Amalapuram vs. The Asstistant Commissioner of Income Tax, Circle-1, Kakinada

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

ITA 169/VIZ/2024[2017-18]Status: DisposedITAT Visakhapatnam12 Sept 2024AY 2017-18

Bench: Shri Duvvuru Rl Reddy, Hon’Ble & Shri S Balakrishnan, Hon’Bleआयकर अपील सं./I.T.A.No.169/Viz/2024 (निर्धारण वर्ा/ Assessment Year: 2017-18) Malipeddi Giridhar V. The Asst. Cit- Circle-1 Income Tax Office D.No.7-1-20, Mgr Mall Deepthi Towers Tk Street, High School Road Main Road, Kakinada - 533001 East Godavari District – 533201 Andhra Pradesh Andhra Pradesh [Pan: Amhpm0210B] (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) करदाता का प्रतततितित्व/ Assessee Represented By : Shri Gvn Hari, Ar राजस्व का प्रतततितित्व/ Department Represented By : Dr. Satyasai Rath, Sr.Ar

Section 143(2)Section 144Section 37(1)Section 40Section 68

section 144 of the Act by making following additions under section 68 of the Act: - a) Unsecured loans of Rs 76,87,947/-; b) Sundry creditors of Rs 2,48,55,217/- and c) Cash deposits of Rs 45,57,000/- 3. Further, Assessing Officer also disallowed ... justified in sustaining the addition of Rs.2,48,55,217 made by the assessing officer u/s 68 of the Act towards unexplained sundry creditors. 5. The learned Commissioner of Income Tax (Appeals) is not justified in sustaining the addition of made by the assessing officer

Satya Kinkar Roy, Kolkata vs. ACIT, Cir-23(1).Hg, Hooghly

In the result, the appeal of the assessee stands allowed

ITA 865/KOL/2023[2013-14]Status: DisposedITAT Kolkata11 Sept 2024AY 2013-14

Bench: Shri Sanjay Garg & Rajesh Kumari.T.A No.865/Kol/2023 Assessment Year: 2013-14 Satya Kinkar Roy……………….………………… ........................……Appellant C/O S. N. Ghosh & Associates, Advocates 2, Garstin Place, 2Nd Floor, Suite No.203, Off Hare Street, Kol-1. [Pan: Ahapr7203H] Vs. Acit, Circle-23(1), Hooghly.................…................…........……...…..…..Respondent Appearances By: Shri Somnath Ghosh, Ar, Appeared On Behalf Of The Appellant. Shri P. P. Barman, Addl. Cit-Sr. Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : June 13, 2024 Date Of Pronouncing The Order : September 11, 2024 आदेश / Order संजय गग", "या"यक सद"य "वारा / Per Sanjay Garg: The Present Appeal Has Been Preferred By The Assessee Against The Order Dated 22.06.2023 Of The National Faceless Appeal Centre [Hereinafter Referred To As ‘Cit(A)’] Passed U/S 250 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). 2. The Assessee Through His Grounds Of Appeal Has Agitated Against The Validity Of Reopening Of Assessment U/S 147 Of The Act As Well As The Validity Of The Impugned Addition Of Rs.48,76,881/- Made By The Assessing Officer On Account Of Failure Of The Assessee To Reconcile The Figures In Respect Of Amount Received As Incentives & Discounts. 3. Initially, The Case Of The Assessee Was Selected For Scrutiny Assessment Proceedings U/S 143(3) Of The Act. The Basic Reason For

Section 143(3)Section 147Section 250

basic reason for I.T.A No.865/Kol/2023 Assessment Year: 2013-14 Satya Kinkar Roy selection for scrutiny was much amount of sundry creditors. After verification of the sundry creditors from whom third party verifications were made and considering the explanations, return of income of the assessee was accepted by the Assessing Officer ... other hand, the plea of the assessee has been that during the original assessment proceedings, the Assessing Officer had duly verified the sundry creditors and also duly examined this issue as the figure of sundry creditors was arrived at after adjustment of incentives and discounts received and made

Ideal Education Trust, Vadodara vs. The Income Tax Officer, Ward Exemption, Vadodara

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

ITA 589/AHD/2024[2011-12]Status: DisposedITAT Ahmedabad10 Sept 2024AY 2011-12

Bench: Shri T.R. Senthil Kumar & Shri Makarand V. Mahadeokarआयकर अपील सं /Ita No.589/Ahd/2024 "नधा"रण वष" /Assessment Year : 2011-12 Ideal Education Trust The Income Tax Officer 1, Indra Duplex, बनाम/ Ward Exemption, Harni Road, Baroda Vadodara V/S. Baroda – 390 022 (Gujarat) "थायी लेखा सं./Pan:Aaati 5704 P (अपीलाथ"/ Appellant) ("" यथ"/ Respondent) Assessee By : Shri Samir Parikh, Ar Revenue By : Smt. Trupti Patel, Sr.Dr सुनवाई क" तार"ख/Date Of Hearing : 05/09/2024 घोषणा क" तार"ख /Date Of Pronouncement: 10/09/2024 आदेश/O R D E R Per Shri Makarand V. Mahadeokar, Am: This Appeal By The Assessee Is Directed Against The Order Of The Ld.Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre (Nfac), Delhi [Hereinafter Referred To As “Ld.Cit(A)” ], Dated 26.02.2024, For The Assessment Year (Ay) 2011-12 Arising Out Of Assessment Order Passed By The Assessing Officer (Hereinafter Referred To As “Ao”) Under Section 143(3) R.W.S. 147 Of The Income Tax Act,1961 [Hereinafter Referred To As “The Act”]. Ideal Education Trust Vs. The Ito-Ward Exemption Asst. Year : 2011-12

For Appellant: Shri Samir Parikh, ARFor Respondent: Smt. Trupti Patel, Sr.DR
Section 10Section 12ASection 143(2)Section 143(3)Section 148Section 48Section 69A

business purposes, it should have been disclosed in his books of accounts. Furthermore, the balance-sheet did not show any capital account or sundry creditors, rendering it unreliable. As a result, the AO concluded that the cash/cheque deposits of Rs.36,97,744/- into the Dena Bank account constituted undisclosed income