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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

Sai Petroleum, Surat vs. Pr.CIT, -1, Surat

In the result, grounds no

ITA 116/SRT/2022[2017-18]Status: DisposedITAT Surat17 Mar 2023AY 2017-18

Bench: Shri Pawan Singhआ.अ.सं./Ita No.116/Srt/2022 (Ay 2017-18) (Hearing In Physical Court) Sai Petroleum Principal Commissioner Of 381, Survey No.415, Sachin, Income-Tax-1, Rom 123, Vs Surat-394230 Aayakhar Bhawan, Majura Pan No: Achfs 8318 Q Gate, Surat-395001 अपीलाथ"/Appellant ""यथ" /Respondent "नधा"रती क" ओर से /Assessee By Shri Ketan S. Jagirdar, C.A राज"व क" ओर से /Revenue By Shri Vinod Kumar, Sr-Dr सुनवाई की तारीख/Date Of Hearing 16.03.2023 उ"घोषणा क" तार"ख/Date Of 17.03.2023 Pronouncement Order Under Section 254(1) Of Income Tax Act Per Pawan Singh: 1. This Appeal By Assessee Is Directed Against The Order Of National Faceless Appeal Centre, Delhi [For Short To As “Nfac/Ld.Cit(A)”] Dated 15.03.2022 For Assessment Year 2017-18, Which In Turn Arises From The Addition Made By The Income Tax Officer, Ward-1(2)(4), Surat / Assessing Officer In Assessment Order Passed Under Section 143(3) Of The Income Tax Act, 1961 (Hereinafter Referred To As ‘The Act’) Dated 27.12.2019. The Assessee Has Raised The Following Grounds Of Appeal:- “1) The Learned Commissioner Of Income Tax (Appeals) Nfac Has Erred In Law & On Facts In Confirming Ads Made By Ld. Ao As Per Order Passed U/S 143(3) Of The Act. Sai Petroleum I. Addition U/S 68 R.W.S. 115Bbe Of The Act Amounting To Rs.13,65,241 As Unreconciled Cash Deposited In Bank Accounted As Cash Sales During Demonetization Period. Ii. Addition U/S 68 Of The Act Amounting To Rs.10,00,000 Received From Debtors As Unaccounted Cash Deposited In Bank During Demonetization Period.

Section 131Section 133ASection 143(3)Section 254(1)Section 68

clarification about discrepancies was sought for from the assessee by Assessing Officer. The Assessing Officer in order to verify the fact about sundry creditor from Swastik Transport Services Udhana and Swastik Logistics Udhana issued notice under section 133(6) of the Act and obtained ledger accounts of as in their ... books of account. On the basis of assessees ledge account, and in the books of accounts of sundry creditors, the Assessing Officer made addition of Rs.10 lakhs by noting alleged discrepancy. Similarly, the Assessing Officer made addition of Rs.13,65,241/- by taking view that average cash sales

Deputy Commisioner of Income Tax, Rajahmahendravaram vs. Andhra Paper Limited, Rajahmahendravaram

In the result, appeal of the Revenue is partly allowed for statistical

ITA 189/VIZ/2022[2013-14]Status: DisposedITAT Visakhapatnam28 Feb 2023AY 2013-14

Bench: Shri Duvvuru Rl Reddy, Hon’Ble & Shri S Balakrishnan, Hon’Bleआयकरअपीलसं./ I.T.A. Nos. 162/Viz/2022 & 189/Viz/2022 ("नधा"रणवष"/ Assessment Years : 2012-13 & 2013-14) Deputy Commissioner Of Income Vs. M/S. Andhra Paper Limited Tax, Circle-1, (M/S. International Paper Rajamahendravaram. Appm Ltd), Sri Ram Nagar, Rajamahendravaram. Pan: Aact 8849 D (अपीलाथ"/ Appellant) (""यथ"/ Respondent) Co Nos: 22 & 23/Viz/2022 (In आयकरअपीलसं./ I.T.A. Nos. 162/Viz/2022 & 189/Viz/2022) ("नधा"रणवष"/ Assessment Years : 2012-13 & 2013-14) M/S. Andhra Paper Limited Vs. Deputy Commissioner Of (M/S. International Paper Appm Income Tax, Circle-1, Ltd), Rajamahendravaram. Sri Ram Nagar, Rajamahendravaram. Pan: Aact 8849 D (अपीलाथ"/ Appellant) (""यथ"/ Respondent) अपीलाथ"क"ओरसे/ Assessee By : Sri K. Chakrapani ""याथ"क"ओरसे/ Revenue By : Sri Mn Murthy Naik, Cit-Dr

For Appellant: Sri K. ChakrapaniFor Respondent: Sri MN Murthy Naik, CIT-DR
Section 142(1)Section 143(2)Section 143(3)Section 14ASection 35D

Unabsorbed depreciation - Rs. 48,78,000/- (iv) Disallowance of Miscellaneous Expenses - Rs. 36,47,979/- (v) Disallowance of sundry creditors - Rs. 30,35,000/- (vi) Disallowance of consumption of Stores and others - Rs. 7,11,06,000/- (vii) Disallowance of repairs & - Rs. 5,61,78,040/- Maintenance (viii) Disallowance ... That on the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in deleting the addition towards sundry creditors amounting to Rs.30,35,000/- when the assessee failed to prove the identity, genuineness and creditworthiness of the creditors before the Assessing Officer. 4. That

Deputy Commissioner of Income Tax, Circle-1, Rajamahendravaram vs. Andhra Paper Limited, Rajamahendravaram

In the result, appeal of the Revenue is partly allowed for statistical

ITA 162/VIZ/2022[2012-13]Status: DisposedITAT Visakhapatnam28 Feb 2023AY 2012-13

Bench: Shri Duvvuru Rl Reddy, Hon’Ble & Shri S Balakrishnan, Hon’Bleआयकरअपीलसं./ I.T.A. Nos. 162/Viz/2022 & 189/Viz/2022 ("नधा"रणवष"/ Assessment Years : 2012-13 & 2013-14) Deputy Commissioner Of Income Vs. M/S. Andhra Paper Limited Tax, Circle-1, (M/S. International Paper Rajamahendravaram. Appm Ltd), Sri Ram Nagar, Rajamahendravaram. Pan: Aact 8849 D (अपीलाथ"/ Appellant) (""यथ"/ Respondent) Co Nos: 22 & 23/Viz/2022 (In आयकरअपीलसं./ I.T.A. Nos. 162/Viz/2022 & 189/Viz/2022) ("नधा"रणवष"/ Assessment Years : 2012-13 & 2013-14) M/S. Andhra Paper Limited Vs. Deputy Commissioner Of (M/S. International Paper Appm Income Tax, Circle-1, Ltd), Rajamahendravaram. Sri Ram Nagar, Rajamahendravaram. Pan: Aact 8849 D (अपीलाथ"/ Appellant) (""यथ"/ Respondent) अपीलाथ"क"ओरसे/ Assessee By : Sri K. Chakrapani ""याथ"क"ओरसे/ Revenue By : Sri Mn Murthy Naik, Cit-Dr

For Appellant: Sri K. ChakrapaniFor Respondent: Sri MN Murthy Naik, CIT-DR
Section 142(1)Section 143(2)Section 143(3)Section 14ASection 35D

Unabsorbed depreciation - Rs. 48,78,000/- (iv) Disallowance of Miscellaneous Expenses - Rs. 36,47,979/- (v) Disallowance of sundry creditors - Rs. 30,35,000/- (vi) Disallowance of consumption of Stores and others - Rs. 7,11,06,000/- (vii) Disallowance of repairs & - Rs. 5,61,78,040/- Maintenance (viii) Disallowance ... That on the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in deleting the addition towards sundry creditors amounting to Rs.30,35,000/- when the assessee failed to prove the identity, genuineness and creditworthiness of the creditors before the Assessing Officer. 4. That

Orissa Chrome Export & Mining Company Pvt. Ltd., Bhubaneswar vs. ACIT, Circle-1(2), Bhubaneswar

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

ITA 4/CTK/2020[2014-15]Status: HeardITAT Cuttack22 Feb 2023AY 2014-15

Bench: Before S/Shri George Mathan, Judicial & Arun Khodpia & Arun Khodpia & Arun Khodpiaassessment Year : 2014-15 Orissa Orissa Chrome Chrome Export Export & & Vs. Acit, Circle Acit, Circle-1(2), Mining Company Pvt Ltd., A Mining Company Pvt Ltd., A- Bhubaneswar Bhubaneswar 65/1, 65/1, Nayapali, Nayapali, Bhubaneswar Bhubaneswar Pan/Gir No. Pan/Gir No.Aaaco 4389 B (Appellant (Appellant) .. ( Respondent Respondent) Assessee By : Shri P.R.Mohanty, Ar P.R.Mohanty, Ar Revenue By : Shri Suresh Shivanand Shivanandan, Cit Dr Date Of Hearing : 22/0 02/2023 Date Of Pronouncement : 22/0 /02/2023 O R D E R Per Bench This Is An Appeal Filed By The Assessee Against The Order Of The Ld This Is An Appeal Filed By The Assessee Against The Order Of The Ld This Is An Appeal Filed By The Assessee Against The Order Of The Ld Cit(A) -1, Bhubaneswar, 1, Bhubaneswar, Dated17.9.2019 In Appeal No. In Appeal No.0344/16-17 For The Assessment Year Assessment Year 2014-15. 2. Shri P.R.Mohanty, Ld Ar Appeared For Th Shri P.R.Mohanty, Ld Ar Appeared For The Assessee & Shri S E Assessee & Shri Suresh Shivanandan, Ld Cit Dr Appeared For The Revenue. , Ld Cit Dr Appeared For The Revenue.

For Appellant: Shri P.R.Mohanty, ARFor Respondent: Shri Suresh Shivanand

that the Assessing Officer had disallowed the opening balance representing the liability for expenses, the claim for Loading hire charges and bogus sundry creditors. It was the submission that in all three issues, additions were made by the Assessing Officer of the opening balances for the relevant assessment year ... expenses, the claim for loading hire charges and the P a g e 5 | 8 Assessment Year : 2014-15 claim in respect of sundry creditors treated as bogus by the Assessing Officer clearly shows that these are not trade creditors. As these are not trade creditors, the decision relied upon

B K Textiles, Cuttack vs. PCIT-1, Bhubaneswar

In the result, appeal of the assessee stands allowed

ITA 40/CTK/2022[2017-18]Status: HeardITAT Cuttack21 Feb 2023AY 2017-18

Bench: Before S/Shri George Mathan, Judicial & Arun Khodpia & Arun Khodpia & Arun Khodpiaassessment Year : 2017-18 M/S. B.K.Textiles, At: Nandi M/S. B.K.Textiles, At: Nandi Vs. Pr. Cit, Bhubaneswar Pr. Cit, Bhubaneswar -1 Sahi, Buxi Bazar, Cuttack Sahi, Buxi Bazar, Cuttack Pan/Gir No. Pan/Gir No.Aahfm 3186 G (Appellant (Appellant) .. ( Respondent Respondent) Assessee By : Shri Keshav Dubey, Ar Keshav Dubey, Ar Revenue By : Shri M.K.Gautam, M.K.Gautam, Cit Dr Date Of Hearing : 21/0 02/2023 Date Of Pronouncement : 21/0 /02/2023 O R D E R Per Bench This Is An Appeal Filed By The Assessee Aga This Is An Appeal Filed By The Assessee Against The Order Of The Ld Inst The Order Of The Ld Pr.Cit,Bhubaneswar Bhubaneswar-1,Dated 2.3.2022 In In Appeal Appeal No. No. Itba/Rev/F/Rev5/2021 Itba/Rev/F/Rev5/2021-22/1040258850(1) For The Assessment Year For The Assessment Year 2017- 18. 2. Shri Keshav Dubey, Ld Ar Appeared For The Assessee & Shri Shri Keshav Dubey, Ld Ar Appeared For The Assessee & Shri Shri Keshav Dubey, Ld Ar Appeared For The Assessee & Shri M.K.Gautam, Ld Cit Dr Appeared For The Revenue. M.K.Gautam, Ld Cit Dr Appeared For The Revenue.

For Appellant: Shri Keshav Dubey, ARFor Respondent: Shri M.K.Gautam
Section 142(1)Section 143(3)Section 263Section 271D

revised by the Pr. CIT, Bhubaneswar-1 through an order u/s.263, wherein, the Pr. CIT has raised the issue of short disclosure of sundry creditors and non-examination of the unsecured loans and consequently non-initiation of penalty u/s.271D. It was the submission that the Pr. CIT has also ... raised the issue of non-examination of large cash deposits. It was the submission that in respect of issue of short disclosure of sundry creditors, the Assessing Officer had issued notice u/s.142(1) of the Act, which is shown at pages 2 & 3 of PB. It was the submission that