← All Phrases

“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

Syama Prasad Mookerjee Port, Kolkata vs. DCIT, Cir. 34, Kolkata

In the result, appeal of the assessee in ITA No

ITA 1412/KOL/2023[2020-21]Status: DisposedITAT Kolkata08 Apr 2024AY 2020-21

Bench: Shri Sanjay Garg, Hon’Ble & Dr. Manish Borad, Hon’Blei.T.A. No. 1411 & 1412/Kol/2023 Assessment Year: 2018-19 & 2020-21 Syama Prasad Mookerjee Port Deputy Commissioner Of Vs Income Tax, Circle -34, 15, Strand Road Kolkata - 700001 Kolkata [Pan : Aaajk0361L] अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : Shri K. M. Sundaram, C.A. Revenue By : Shri Rakesh Kumar Das, Cit, D/R सुनवाई क" तारीख/Date Of Hearing : 21/02/2024 घोषणा क" तारीख /Date Of Pronouncement: 08/04/2024 आदेश/O R D E R Per Bench : Both These Appeals Are Directed At The Instance Of The Assessee Against The Order Of The National Faceless Appeal Centre - Delhi (Hereinafter The “Ld. Cit(A)”) Dt. 27/10/2023 For The Assessment Year 2018-19 & Dt. 06/11/2023 For The Assessment Year 2020-21 Passed U/S 250 Of The Income Tax Act, 1961 (“The Act”). 2. The Assessee Has Raised The Following Grounds Of Appeal For Assessment Year 2018-19:- “1. Disallowance Of Rs.68,13,600 U/S 14A R.W.R. 8D(2)(Ii) Is Liable To Be Deleted For The Following Reasons Since The Undisputedly The Appellant Had Nil Exempt Income & That The Entire Investments Are Made In Port Related Strategic Entities Out Of Its Own Funds. A) As Duly Mentioned In Paragraph No.8.7 Of The Impugned Order, The Issue Of Whether The Explanation To Section 14A Inserted W.E.F. 01.04.2022 Is Prospective Or Retrospective Is Not Settled & Hon'Ble High Court Of Delhi Has Held It To Be Applicable Prospectively, Namely W.E.F. Ay 2022-23, Which Subsequent To The Subject Ay 2018-19. 2

For Appellant: Shri K. M. Sundaram, C.AFor Respondent: Shri Rakesh Kumar Das, CIT, D/R
Section 14ASection 250Section 41(1)

they have not dealt with these two companies in the year under appeal nor there is any brought forward balance of these concerns as sundry creditors. Though there were certain transactions entered with these concerns in the past, but they were squared off. He further submitted that if an opportunity

Syama Prasad Mookerjee Port, Kolkata vs. DCIT, Cir. 34, Kolkata

In the result, appeal of the assessee in ITA No

ITA 1411/KOL/2023[2018-19]Status: DisposedITAT Kolkata08 Apr 2024AY 2018-19

Bench: Shri Sanjay Garg, Hon’Ble & Dr. Manish Borad, Hon’Blei.T.A. No. 1411 & 1412/Kol/2023 Assessment Year: 2018-19 & 2020-21 Syama Prasad Mookerjee Port Deputy Commissioner Of Vs Income Tax, Circle -34, 15, Strand Road Kolkata - 700001 Kolkata [Pan : Aaajk0361L] अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : Shri K. M. Sundaram, C.A. Revenue By : Shri Rakesh Kumar Das, Cit, D/R सुनवाई क" तारीख/Date Of Hearing : 21/02/2024 घोषणा क" तारीख /Date Of Pronouncement: 08/04/2024 आदेश/O R D E R Per Bench : Both These Appeals Are Directed At The Instance Of The Assessee Against The Order Of The National Faceless Appeal Centre - Delhi (Hereinafter The “Ld. Cit(A)”) Dt. 27/10/2023 For The Assessment Year 2018-19 & Dt. 06/11/2023 For The Assessment Year 2020-21 Passed U/S 250 Of The Income Tax Act, 1961 (“The Act”). 2. The Assessee Has Raised The Following Grounds Of Appeal For Assessment Year 2018-19:- “1. Disallowance Of Rs.68,13,600 U/S 14A R.W.R. 8D(2)(Ii) Is Liable To Be Deleted For The Following Reasons Since The Undisputedly The Appellant Had Nil Exempt Income & That The Entire Investments Are Made In Port Related Strategic Entities Out Of Its Own Funds. A) As Duly Mentioned In Paragraph No.8.7 Of The Impugned Order, The Issue Of Whether The Explanation To Section 14A Inserted W.E.F. 01.04.2022 Is Prospective Or Retrospective Is Not Settled & Hon'Ble High Court Of Delhi Has Held It To Be Applicable Prospectively, Namely W.E.F. Ay 2022-23, Which Subsequent To The Subject Ay 2018-19. 2

For Appellant: Shri K. M. Sundaram, C.AFor Respondent: Shri Rakesh Kumar Das, CIT, D/R
Section 14ASection 250Section 41(1)

they have not dealt with these two companies in the year under appeal nor there is any brought forward balance of these concerns as sundry creditors. Though there were certain transactions entered with these concerns in the past, but they were squared off. He further submitted that if an opportunity

DCIT, CC-7(2), Mumbai vs. M/S. Patanjali Foods Ltd., ( Formerly Known As Ruchi Soya Industries Ltd, Mumbai

In the result, the appeal and cross objections of the assessee are

ITA 1176/MUM/2023[2012-13]Status: DisposedITAT Mumbai05 Apr 2024AY 2012-13

Bench: Shri Aby T. Varkey, Jm & Shri S Rifaur Rahman, Am आयकर अपील सं/ I.T. A. No. 1172/Mum/2023 (निर्धारण वर्ष / Assessment Year: 2010-11) & आयकर अपील सं/ I.T. A. No. 1175/Mum/2023 (निर्धारण वर्ष / Assessment Year: 2012-13) & आयकर अपील सं/ I.T. A. No. 1176/Mum/2023 (निर्धारण वर्ष / Assessment Year: 2012-13) Dcit, Central Circle-7(2) Room No. 637, 6Th Floor, Aayakar Bhavan, M. K. Road, Mumbai-400020. बनाम / M/S. Patanjali Foods Ltd Vs. (Formerly Known As Ruchi Soya Industries Ltd) 616, Tulsiani Chambers, Nariman Point, Mumbai- 400021. Cross Objection No.51/Mum/2023 (Arising Out Of I.T. A. No. 1172/Mum/2023) (निर्धारण वर्ष / Assessment Year: 2010-11) M/S. Patanjali Foods Ltd (Formerly Known As Ruchi Soya Industries Ltd) 616, Tulsiani Chambers, Nariman Point, Mumbai- 400021. बनाम / Dcit, Central Circle-7(2) Vs. Room No. 637, 6Th Floor, Aayakar Bhavan, M. K. Road, Mumbai-400020. & आयकर अपील सं/ I.T. A. No. 320/Mum/2023 (निर्धारण वर्ष / Assessment Year: 2012-13) M/S. Patanjali Foods Ltd (Formerly Known As Ruchi Soya Industries Ltd) बनाम / Vs. Dcit, Central Circle-7(2) Room No. 637, 6Th Floor, Aayakar Bhavan, M. K. Road, Mumbai-400020. 616, Tulsiani Chambers, Nariman Point, Mumbai- 400021. स्थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aaaci1220M 2

For Appellant: Shri S. S. Nagar & Shri BFor Respondent: Dr. Mahesh Akhade (DR)
Section 132Section 143(2)Section 153A

systematic pattern of evading taxes by incurring losses in its other companies and that a distinctive pattern was noted which showed that sundry creditors were 11 ITA No.1172, 1175 & 1176/M/2023 ITA. No.320/Mum/2023 & CO No. 51/Mum/2023 A.Y Nos. 2010-11 & 2012-13 M/s. Patanjali Foods Ltd. matched with sundry debtors plus

DCIT, CC-7(2), Mumbai vs. M/S. Patanjali Foods Ltd., ( Formerly Known As Ruchi Soya Industries Ltd, Mumbai

ITA 1175/MUM/2023[2012-13]Status: DisposedITAT Mumbai05 Apr 2024AY 2012-13

Bench: Shri Aby T. Varkey, Jm & Shri S Rifaur Rahman, Am आयकर अपील सं/ I.T. A. No. 1172/Mum/2023 (निर्धारण वर्ष / Assessment Year: 2010-11) & आयकर अपील सं/ I.T. A. No. 1175/Mum/2023 (निर्धारण वर्ष / Assessment Year: 2012-13) & आयकर अपील सं/ I.T. A. No. 1176/Mum/2023 (निर्धारण वर्ष / Assessment Year: 2012-13) Dcit, Central Circle-7(2) Room No. 637, 6Th Floor, Aayakar Bhavan, M. K. Road, Mumbai-400020. बनाम / M/S. Patanjali Foods Ltd Vs. (Formerly Known As Ruchi Soya Industries Ltd) 616, Tulsiani Chambers, Nariman Point, Mumbai- 400021. Cross Objection No.51/Mum/2023 (Arising Out Of I.T. A. No. 1172/Mum/2023) (निर्धारण वर्ष / Assessment Year: 2010-11) M/S. Patanjali Foods Ltd (Formerly Known As Ruchi Soya Industries Ltd) 616, Tulsiani Chambers, Nariman Point, Mumbai- 400021. बनाम / Dcit, Central Circle-7(2) Vs. Room No. 637, 6Th Floor, Aayakar Bhavan, M. K. Road, Mumbai-400020. & आयकर अपील सं/ I.T. A. No. 320/Mum/2023 (निर्धारण वर्ष / Assessment Year: 2012-13) M/S. Patanjali Foods Ltd (Formerly Known As Ruchi Soya Industries Ltd) बनाम / Vs. Dcit, Central Circle-7(2) Room No. 637, 6Th Floor, Aayakar Bhavan, M. K. Road, Mumbai-400020. 616, Tulsiani Chambers, Nariman Point, Mumbai- 400021. स्थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aaaci1220M 2

For Appellant: Shri S. S. Nagar & Shri BFor Respondent: Dr. Mahesh Akhade (DR)
Section 132Section 143(2)Section 153A

systematic pattern of evading taxes by incurring losses in its other companies and that a distinctive pattern was noted which showed that sundry creditors were matched with sundry debtors plus loans plus advances plus investments by them. This according to the AO implied that the turnover achieved by such other