“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

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

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

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

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

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

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

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

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

Shweta Somani, Alirajpur vs. ITO, Jhabua

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

ITA 314/IND/2023[2011-12]Status: DisposedITAT Indore04 Jan 2024AY 2011-12

Bench: Shri Vijay Pal Rao & Shri Manish Boradshweta Somani Ito 111, M.G. Road Alirajpur Jhabua Jhabua Vs. Madhya Pradesh (Appellant / Assessee) (Respondent/ Revenue) Pan: Bqkps 1148C Assessee By Shri Soumya Bumb, Ar Revenue By Shri Ashish Porwal, Sr. Dr Date Of Hearing 02.01.2024 Date Of Pronouncement 04.01.2024

Section 142(1)Section 143(3)Section 147Section 183

record. The assesse fails to submit of his business details along with required information ie. copy ledger of multi commodity transactions, details of sundry creditors. debtors, demat account etc. The assessee simply submit that she had earn income of Rs 3 ,78,304/- (details of which is given below ... that the appellant failed to submit the details of the business along- with required information i.e. copy ledger of multi commodity transactions, details of sundry creditors, debtors, demat account etc. The AO concluded that the appellant failed to explain the source of cash deposit of Rs.62

Balaji Jewellers, Jaipur vs. ACIT CC -4, Jaipur

In the result, the appeal of the assessee is allowed

ITA 433/JPR/2023[2018-19]Status: DisposedITAT Jaipur04 Jan 2024AY 2018-19

Bench: SHRI SANDEEP GOSAIN (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Shri Shrawan Kumar Gupta, AdvocateFor Respondent: Shri Ajay Malik, CIT

Section 115BSection 132Section 133ASection 139(1)Section 142Section 143(2)Section 143(3)Section 145(3)Section 234ASection 68

show that the income is from any particular source. It is for the assessee to prove that, even if the sundry creditors represent income, it is income from a source which has already been taxed. There is nothing in law which prevents the AO in an appropriate case in taxing ... balance was built up through valid Purchases which’s payments have been made through Account Payee cheques and it is also appreciable that no sundry creditors balance were laying pending as on 15/02/2018 which can give a second thought that to generate Inventory fake purchase bills would have been arranged

Prarambh Multitrade (P)Ltd, Kolkata vs. ITO, Ward-2(1), Kolkata

In the result, the appeal of the assessee stands allowed

ITA 1014/KOL/2023[2009-10]Status: HeardITAT Kolkata02 Jan 2024AY 2009-10

Bench: Shri Sanjay Garg & Shri Girish Agrawali.T.A. No.1014/Kol/2023 Assessment Year: 2009-10 M/S Prarambh Multitrade Pvt. Ltd..........................…...……………....Appellant Room No.401A, 154, Lenin Sarani, Kolkata-700013. [Pan: Aaccp8985C] Vs. Ito, Ward-2(1), Kolkata........................................................…..…..... Respondent Appearances By: Shri Miraj D. Shah, Advocate, Appeared On Behalf Of The Appellant. Shri Manas Mondal, Addl. Cit-Sr. Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : December 06, 2023 Date Of Pronouncing The Order : January 02, 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 24.08.2023 Of The National Faceless Appeal Centre (Hereinafter Referred To As The ‘Cit(A)’) Passed U/S 250 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). 2. The Assessee In This Appeal Has Taken The Following Grounds Of Appeal: “1. That The Order Passed U/S 250 Is Bad In Law As Well As On Facts Of The Case. 2. That The Hon'Ble Commissioner Of Income Tax (A) - Nfac Erred In Law As Well As On Facts Of The Case By Not Providing Reasonable Opportunity Of Hearing To The Appellant Company.

Section 250Section 41Section 41(1)Section 68

well as on facts of the case by confirming the addition made by the Learned Assessing Officer by making addition of sundry creditors of Rs.2,22,65,000/- by invoking the provision of section 41(1) and making addition by treating the aforesaid amount as cessation of liability. 7. That ... Assessing Officer of Rs.2,22,65,000/- u/s 41(1) of the Act on account of cessation of liability in respect of sundry creditors shown by the assessee. 4. At the outset, the ld. counsel for the assessee has invited our attention to the balance sheet of the assessee

M/S Jayganga Exim India (P) Ltd., Kolkata vs. DCIT, Circle-II, Bhopal

ITA 28/IND/2022[2012-13]Status: DisposedITAT Indore02 Jan 2024AY 2012-13

Bench: Shri Vijay Pal Rao & Shri B.M. Biyaniassessment Year: 2012-13 M/S. Jayganga Exim India Pvt. Dy. Cit, Limited Central-Ii, [Formerly Known As ‘Jay Jyoti Bhopal (India) Pvt. Ltd.’] बनाम/ 26, Col. Biswas Road, Ground Floor, Vs. West Side Flat, Kolkata (Assessee / Appellant) (Revenue / Respondent) Pan: Aaacj 8822 E Assessee By Shri Harsh Vijaywargiya, Ca Revenue By Ms. Simran Bhullar, Cit Dr Date Of Hearing 21.11.2023 Date Of Pronouncement 02.01.2024

Section 144Section 147Section 37Section 68

facts in confirming the action of ld. AO in making aggregate addition of Rs. 4,57,21,842/- on account of sundry creditors by treating it as alleged unexplained income of assessee u/s 68 and that too by recording incorrect facts and findings and in violation of principles of natural ... confirming the action of ld. AO in making aggregate addition of Rs. 4,57,21,842/- on account of sundry creditors by treating it as alleged unexplained income of assessee u/s 68, is beyond jurisdiction, bad in law, illegal, unjustified, against the principles of natural justice, void ab initio

M/S Rama Enterprises, Mumbai vs. ITO Ward 27 (3) (1), Mumbai

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

ITA 2992/MUM/2023[2009-10]Status: DisposedITAT Mumbai29 Dec 2023AY 2009-10

Bench: Shri B.R. Baskaran & Shri Sandeep Singh Karhail

For Appellant: NoneFor Respondent: Smt. Mahita Nair

Section 133(6)Section 143(3)Section 144Section 147Section 148Section 250

issued on 27/01/2015. During the reassessment proceedings, notice under section 133(6) of the Act issued to one of the sundry creditors, i.e. M/s Vikas Steel, was received back unserved. As per the assessee, he owes Rs. 72,08,903 to M/s Vikas Steel. Further, the assessee was asked ... show cause as to why the aforesaid sum shown as sundry creditors be not added to the total income of the assessee. However, in response to the show cause notice, no explanation was offered by or on behalf of the assessee. Since the assessee failed to discharge the onus cast

Rajesh G Jain, Mira-Bhayandar vs. ITO Ward 2(2), Thane Park

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

ITA 150/MUM/2022[2010-2011]Status: DisposedITAT Mumbai29 Dec 2023AY 2010-2011

Bench: Shri B.R. Baskaran & Shri Sandeep Singh Karhail

For Appellant: Shri Lalit MunoyatFor Respondent: Smt. Mahita Nair

Section 250Section 254(1)

circumstances of the case and in law, the Ld. CIT(A) erred in disallowing a sum of Rs. 67,17,345/- being unexplained sundry creditors for goods outstanding at the year-end without realizing the fact that these creditors represent unpaid alleged Hawala purchases for the year which also amounts ... assessee’s appeal are partly allowed. 11. The issue arising in ground No. 6, raised in assessee’s appeal, pertains to the disallowance of sundry creditors. 12. The brief facts of the case pertaining to this issue, as emanating from the record, are: During the assessment proceedings the assessee

Engineering Professional Company Pvt. Ltd., Surat vs. The Deputy Commissioner of Income Tax, Circle-1(1)(1), Surat

In the result, all the grounds raised by the assessee are allowed for statistical purposes

ITA 453/SRT/2023[2016-17]Status: DisposedITAT Surat28 Dec 2023AY 2016-17

Bench: Shri Pawan Singh & Dr Arjun Lal Sainiआ.अ.सं./Ita Nos.451 To 453/Srt/2023 (Ays 2011-12, 2014-15 & 2016-17) (Hearing In Physical Court) Engineering Professional Co. Pvt. Ltd. 444, Royal Arcade, Opp. Deputy Commissioner Of Sarthana Zoon, Varachha Income Tax, Circle-1(1)(1), Vs Road, Near Sarthana Jakat Surat, Aaykar Bhavan, Naka, Surat-395006 Majura Gate, Surat-395001 Pan : Aabce 0313 Q अपीलाथ"/Appellant ""थ" /Respondent

Section 144Section 254(1)

raised by assessee, in all three years are back to the file of respective Assessing Officer to examine or verify all the confirmations of sundry creditors and to pass order in accordance with law, after giving reasonable opportunity of being 4 ITA Nos.451-453/SRT/2023 (A.Ys

Engineering Professional Company Pvt. Ltd., Surat vs. The Deputy Commissioner of Income Tax, Circle-1(1)(1), Surat

In the result, all the grounds raised by the assessee are allowed for statistical purposes

ITA 452/SRT/2023[2014-15]Status: DisposedITAT Surat28 Dec 2023AY 2014-15

Section 144Section 254(1)

Engineering Professional Company Pvt. Ltd., Surat vs. The Deputy Commissioner of Income Tax, Circle-1(1)(1), Surat

In the result, all the grounds raised by the assessee are allowed for statistical purposes

ITA 451/SRT/2023[2011-12]Status: DisposedITAT Surat28 Dec 2023AY 2011-12

Section 144Section 254(1)

Gsr Industries, Noida vs. DDIT, International Taxation, Noida

ITA 2060/DEL/2023[2020-21]Status: DisposedITAT Delhi26 Dec 2023AY 2020-21

Bench: Sh. Saktijit Deydr. B. R. R. Kumar

For Appellant: Sh. Prakash. K. Sinha, Adv. &For Respondent: Sh. Vizay B. Vasanta, CIT-DR

Section 143Section 143(3)Section 144(15)Section 144CSection 144C(15)Section 153(1)Section 92C

During the course of the assessment proceedings, the assessee had failed to provide the basic information such address, PAN etc. regarding seven of its sundry creditors. In this regard, the liability of Rs. 4,38,039/-was proposed to be disallowed. The assessee has failed to provide any information regarding ... seven sundry creditors during 7 GSR Industries the proceedings before the DRP. It shows that these creditors are bogus creditors claimed by the assesse.  During the course of the assessment proceedings 17 sundry creditors were not found to be genuine and the corresponding liabilities amounting

DCIT, Circle-12(1), New Delhi vs. Info Edge India Ltd., New Delhi

Appeal is allowed

ITA 5185/DEL/2019[2013-14]Status: DisposedITAT Delhi21 Dec 2023AY 2013-14

Bench: Shri Saktijit Dey, Hon’Ble & Dr. B. R. R. Kumar

For Appellant: Sh. S.K Aggarwal, CAFor Respondent: Sh. Amit Katoch, Sr. DR

Section 143(3)Section 14ASection 37

erred in-deleting the addition of Rs. 21,87,126/- made by Assessing Officer on a/c of write off of sundry creditors holding that the liability is recognized as payable in the books of account of the assessee. The assessee is a public limited company and was incorporated on 015t ... Edge India Ltd., Creditors - stale cheques: 26. During the year under consideration an amount of INR 21,87,126/- included as Stale Cheque under Sundry Creditors in relation to payments made through cheques to the various parties but not credited to the account reasons known to the payee

K A International, Mumbai vs. ITO-19(2)(2), Mumbai

In the result, appeals filed by the assessee are partly allowed

ITA 2908/MUM/2023[2012-13]Status: DisposedITAT Mumbai20 Dec 2023AY 2012-13

Bench: Shri S. Rifaur Rahman, Hon'Ble & Ms. Kavitha Rajagopal, Hon'Blem/S. Ka International V. Income Tax Officer – 19(2)(2) 1St Floor, 62, Zaveri House Piramal Chambers, Lal Baugh N.S. Patkar Marg, Grant Road Mumbai - 400013 Mumbai - 400007 Pan: Aaafk0864E (Appellant) (Respondent) Assessee Represented By : Shri Himanshu Gandhi Department Represented By : Shri P.D. Chougule

Section 133(6)Section 143(1)Section 143(2)Section 147Section 148Section 69C

invoices, Tax Audit Report, stock book, VAT Audit Report, Reconciliation of purchases with the VAT Audit Report and profit and loss Report, list of sundry creditors and sundry debtors and submitted that the purchases made are genuine. 4. During the assessment proceedings, Assessing Officer issued notice

The DCIT, Morbi Circle, Morbi vs. M/S. Clayris Ceramics Pvt. Ltd., Morbi

In the result, the appeal of the revenue is hereby dismissed

ITA 287/RJT/2018[2013-14]Status: DisposedITAT Rajkot20 Dec 2023AY 2013-14

Bench: Shri Waseem Ahmed & Shri Siddhartha Nautiyalआयकरअपीलसं./Ita No. 287/Rjt/2018 With Co No. 28/Rjt/2018 निर्धररवरध/Asstt. Year: 2013-14 D.C.I.T, M/S. Clayris Ceramic Pvt. Ltd., Morbi Circle, Vs. Opp. Soriso Ceramics, Morbi. B.H Fame Ceramics Pvt., 8A-Nh, Morbi.

For Appellant: Shri Mehul Ranpura, A.RFor Respondent: Shri Shramdeep Sinha, CIT. D.R

Section 68

application and premium thereon receivable from these share allottees for Rs. 6,29,01,740/- were adjusted against the outstanding balance of 9 different sundry creditors for Rs. 5,50,63,800/- and against the outstanding balance of 2 loan creditors namely Priya Sales corporation and Dhiman Trading ... parties against the purchase of raw materials. The assessee against the purchase of raw materials was liable to make the payment to the sundry creditors. But the assessee has not shown any payment to such sundry creditors but adjusted the same against the amount of share application money and premium

Idana Pet Industries P. Ltd., Udaipur vs. ACIT, Circle-1, Udaipur

In the result, the appeal of the assessee bearing ITA No

ITA 330/JODH/2023[2015-16]Status: DisposedITAT Jodhpur19 Dec 2023AY 2015-16

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjee

Section 143(3)Section 250oSection 40A(2)(b)Section 56Section 56(2)(viib)

which is far above the NAV of the allotted share. For Assessment Year 2015-16, the addition was confirmed for 15 lacs for undisclosed sundry creditors and Rs.4,72,088/- for payment of expenses made to relative u/s 40A(2)(b) of the Act. Aggrieved assessee filed an appeal before ... which is reproduced as below: “5.2 Ground No.2 is the addition of Rs. 15,00,000/- as unexplained credit entry in the list of sundry creditors in the name of Iskam Infra Pvt Ltd, The AR of the appellant could not produce address of the creditors and PAN. The statement

Idana Pet Industries P. Ltd., Udaipur vs. ITO, Ward-2(1), Udaipur

In the result, the appeal of the assessee bearing ITA No

ITA 329/JODH/2023[2014-15]Status: DisposedITAT Jodhpur19 Dec 2023AY 2014-15

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjee

Section 143(3)Section 250oSection 40A(2)(b)Section 56Section 56(2)(viib)

The ACIT Central-Ujjain, Ujjain vs. M/S Italian Edibles P Ltd, Indore

In the result, appeal of the revenue is dismissed

ITA 219/IND/2022[2019-20]Status: DisposedITAT Indore19 Dec 2023AY 2019-20

Bench: Shri Vijay Pal Rao & Shri B.M. Biyaniacit (Central) M/S. Italian Edibles Pvt. Ujjain Ltd. Vs. Udhyog Nagar, Palda Indore (Appellant / Revenue) (Assessee /Respondent) Pan: Aacci 2746N Revenue By Ms. Simran Bhullar, Cit-Dr Respondent By Shri Pankaj Shah & Soumya Bumb Ars Date Of Hearing 12.10.2023 Date Of Pronouncement 19.12.2023

Section 115BSection 133ASection 69Section 69B

High Court has further held that another amount of Rs. 10,00,000/- surrendered on account of sundry creditors, repairs to building and advances to staff were related to business carried on by the assessee and upheld this view of the lower authorities. In the case of Famina ... income u/ss 69, 694, 69B and 69C of the Act. 25. As far as the surrender of Rs. 132 lacs made on account of sundry creditors and advances received from customers and Rs.198 lacs on account of gross profit on sale out of the books, both of them clearly

Vrundavan Restaurant, Surat vs. Income Tax Officer, Ward - 1(2)(1) (New) Ward-1(2)(5), Vadodara (Old), Surat

In the result, the grounds of appeal raised by the assessee are allowed for statistical purposes

ITA 683/SRT/2023[2009-10]Status: DisposedITAT Surat19 Dec 2023AY 2009-10

Bench: Shri Pawan Singh & Dr. Arjun Lal Saini(Physical Hearing) Vrundavan Restaurant, I.T.O., (1)-U-2, Ashirwad Square, Udhna Ward-1(2) (1), Surat- Vs. Magdalla Road, Surat 395007- New, New, (2)- 39/1, 4Th Floor, Vaibhav Ward 1(2)(5), Vadodara- Residency, Arunday Crossword Circle Old. Alkapuri, Alkapuri, Vadodara-390007 – Old. Pan No. Aagfv 8310 G Appellant/ Assessee Respondent/ Revenue

Section 147Section 148Section 250(6)Section 254(1)Section 41(1)Section 68

fact to uphold AO’s addition U/s 41(1) of the Act for Rs. 41,34,164/- on account of cession of liability w.r.t. sundry creditors.” 2. Rival submission of both the parties have been heard and record perused. The learned Authorised Representative (ld. AR) of the assessee submits that

Indiabullas Housing Finance Limited, Mumbai vs. DCIT, Central Circle-6(4), Mumbai

ITA 821/MUM/2023[2018-2019]Status: DisposedITAT Mumbai18 Dec 2023AY 2018-2019

For Appellant: Shri K. Gopal &For Respondent: Shri Rakesh Garg

Section 143(1)Section 143(3)Section 14ASection 37(1)

Deferred tax liabilities (net) 122,96,68,955 Other long-term liabilities 401,84,52,130 Long-term provisions 1052,12,25,604 Sundry Creditors 28,51,89,092 Other current liabilities 22057,45,79,245 Short-term provisions 222,57,17,135 Total 36776,93,02,756 6.7. However

Priyamda Media & Infotainment Private Limited, New Delhi vs. DCIT Circle-20(1), New Delhi

In the result, the appeal of the assessee is allowed

ITA 1598/DEL/2020[2014-15]Status: DisposedITAT Delhi18 Dec 2023AY 2014-15

Bench: Sh. N. K. Billaiya & Sh. Kul Bharat

Section 133Section 133(6)Section 143Section 145Section 271Section 40aSection 41Section 41(1)

While scrutinizing the return of income the AO noticed sundry payable in the balance sheet and asked the assessee to file confirmation of sundry creditors. The assessee showed its inability to file the confirmation. Notice u/s. 133 (6) of the Act was issued. The AO summarized the situation ... otherwise not be the assessee's income. It has been further found as fact that the assessee had filed the copies of accounts of sundry creditors signed by the concerned creditors, In view of this fact, in our opinion, the ITAT has rightly come to the conclusion that confirmation from

Priyamda Media & Infotainment P.Ltd, New Delhi vs. DCIT, Circle-20(1), New Delhi

In the result, the appeal of the assessee is allowed

ITA 7489/DEL/2017[2014-15]Status: DisposedITAT Delhi18 Dec 2023AY 2014-15

Bench: Sh. N. K. Billaiya & Sh. Kul Bharat

Section 133Section 133(6)Section 143Section 145Section 271Section 40aSection 41Section 41(1)