“ trade creditors ”

CIT v. Korlay Trading Co. Ltd.

When a cash credit is found, the assessee discharges the initial burden by proving the identity of the creditor and the genuineness of the transaction, shifting the burden to the Revenue. The assessee is not required to prove the source of the creditor's funds (source of source).

232 ITR 820 · 1998 · High Court

122

CIT v. Gotan Lime Khaniz Udyog

To discharge the onus under Section 68, an assessee must establish the identity of the creditor, the genuineness of the transaction, and the creditworthiness of the creditor. Merely providing basic documentary evidence or a file number is insufficient; each credit entry requires a separate, detailed explanation.

256 ITR 243 · 2002 · High Court

CIT v. Shri Vardhman Overseas Ltd.

The mere rejection of an assessee's books of account under Section 145(3) does not automatically warrant an addition to the returned income. The Assessing Officer must consider the books alongside historical data and other collected material after confronting the taxpayer.

343 ITR 408 · 2012 · High Court

Aravali Trading Co. v. ITO

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.

8 DTR 199 · 2008 · High Court

552 (SC) Zaveri Diamonds v. CIT 11-12 3

An assessee discharges their onus under Section 68 for cash credits by proving the identity of the creditor, the genuineness of the transaction, and the creditor's creditworthiness. The assessee is not required to prove the source of the creditor's funds ('source of source'), unless evidence suggests the money originated from the assessee itself.

118 Taxmann.com 166 · 2020 · High Court

Chief CIT v. Kesaria Tea Company Limited

The court considers the evidentiary value of unaudited books and loose papers when assessing income, particularly concerning trade creditors and their verification.

254 ITR 434 · 2002 · Supreme Court

Hindustan Tea Trading Co. Ltd. v. CIT

For Section 41(1) of the Income Tax Act to apply, the mere expiry of the limitation period does not constitute cessation of liability; there must be an explicit act by the creditor, such as a release or admission of write-off, confirming that the liability has ceased without the possibility of revival.

263 ITR 289 · 2003 · High Court

ITA 361/BANG/2021[2016-17]Status: DisposedITAT Bangalore07 Feb 2022AY 2016-17

Under Section 68, the assessee discharges the initial onus by producing sufficient material and explanation for cash credits. Once material is provided, the Assessing Officer must conduct a proper and thorough inquiry into it, as a half-hearted inquiry or overlooking materials is impermissible.

Judgments citing trade creditors

Neogenetics Foods Private Limited, Bangalore vs. The Deputy Commissioner of Income Tax, Circle-3(1)(1), Bangalore

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

Bench: Shri N. V. Vasudevan & Shri B. R. Baskaranit(Tp)A No.361/Bang/2021 Assessment Year : 2016-17 M/S. Neogenetics Foods Private Limited, Vs. Dcit, Level 14 & 15, Concorde Towers, Ub City, 1 Circle - 3(1)(1), Vittal Malya Road, Ub City, Bengaluru. Bengaluru – 560 001. Pan : Aadcn 7689 L Assessee Respondent Assessee By : Shri. Narendra Kumar Jain, Advocate Revenue By : Dr. Manjunath Karkihalli, Cit(Dr)(Itat), Bengaluru Date Of Hearing : 03.02.2022 Date Of Pronouncement : 07.02.2022 O R D E R Per N V Vasudevan

For Appellant: Shri. Narendra Kumar Jain, AdvocateFor Respondent: Dr. Manjunath Karkihalli, CIT(DR)(ITAT), Bengaluru

Section 144CSection 92BSection 92C

have erred in invoking provisions of Section 68 without appreciating that Sec 68 is not applicable in the instant case. The amount payable to trade creditors being genuine, addition is liable to be deleted. 14. The lower authorities have erred in making additions u/s 68 amounting ... learned Counsel for the assessee also submitted that payments have been made to all the 3 parties and that evidence would demonstrate that the trade creditors were genuine. Taking into account these circumstances, we are of the view that it would be just and appropriate to set aside the issue

M/S.Herbalife International India Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Bangalore

In the result, assessee’s appeal is partly allowed

ITA 1723/BANG/2016[2002-03]Status: DisposedITAT Bangalore04 Feb 2022AY 2002-03

Bench: Shri N. V. Vasudevan & Shri B R Baskaranassessment Year : 2002-03

For Appellant: Shri Padam Chand Khincha, C.AFor Respondent: Shri Sumer Singh Meena, CIT(DR OSD)

Section 143(1)Section 143(2)Section 143(3)Section 271(1)(c)

Disallowance of foreign exchange loss 2. Erred in not appreciating the fact that foreign exchange loss (arising either on account of payment to trade creditors or year-end Page 3 of 22 restatement of their balances) is revenue in nature and thereby not deciding the issue himself but giving directions

ACIT, New Delhi vs. M/S. Viraj Steel & Energy Pvt. Ltd., New Delhi

In the result, appeal of the Revenue is dismissed

ITA 3637/DEL/2017[2013-14]Status: HeardITAT Delhi04 Feb 2022AY 2013-14

Bench: Sh. Anil Chaturvedi & Sh. Amit Shukla

Section 133(6)Section 143(3)

sundry creditors. Assessee inter alia submitted that the creditors arise out of the genuine business transactions of purchase and these are the normal trade creditors. It was further submitted that since the sales arising out the same purchases are accepted to be genuine, the trade creditors cannot be considered ... assessee deleted the addition. While deleting the addition, CIT(A) noted that perusal of the details of sundry creditors revealed the reduction in “Trade Creditors” from Rs. 8.83 crore (rounded off) to Rs. 7.21 crore (rounded off) during the year under consideration and the reduction in “Trade Creditors” for capital

Rajeshkumar Chamaria, Mumbai vs. ITO 24(3)(5), Mumbai

In the result, these appeals by the assessee are allowed

ITA 796/MUM/2020[2012-13]Status: DisposedITAT Mumbai06 Jan 2022AY 2012-13

Bench: Shri Shamim Yahya

Section 143(3)

assessee. No such exercise has been done by the AO. This is fatal to the assessment here. Moreover, outstanding creditors which are trade creditors can be added only under provisions of section 41(1) of the Act. No case has been made out that section 41(1) has been invoked

Rajasthan Prime Steel Processing Center Pvt. Ltd., New Delhi vs. National E- Assessment Centre, New Delhi

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

ITA 488/DEL/2021[2016-17]Status: DisposedITAT Delhi11 Nov 2021AY 2016-17

Bench: Ms. Suchitra Kambledr. B. R. R. Kumar(Through Video Conferencing)

For Appellant: Sh. Nageshwar Rao, AdvFor Respondent: Sh. Shashi Bhusan Shukla, CIT DR

Section 143(3)

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘I-2’, NEW DELHI Before Ms. Suchitra Kamble, Judicial Member Dr. B

DCIT, Central Circle- 28, New Delhi vs. Maximal Infrastructure Pvt. Ltd., New Delhi

In the result, the appeal of the Revenue is dismissed

ITA 7238/DEL/2017[2014-15]Status: DisposedITAT Delhi27 Aug 2021AY 2014-15

Bench: Shri O.P. Kant & Shri K.N. Chary[Through Video Conferencing] Assessment Year: 2014-15

Section 143Section 37

years. Hence, such an interest cannot form part of the work-in-progress. The interest payment on the outstanding balance in respect of the trade creditors is revenue in nature and allowable expenditure while computing business income. Accordingly, we uphold the order of the CIT (A) deleting the above addition

DCIT, New Delhi vs. M/S Ajay Enterprises Pvt. Ltd., New Delhi

Appeal is dismissed and appeal of the assessee in ITA No

ITA 2083/DEL/2015[2012-13]Status: DisposedITAT Delhi30 Jul 2021AY 2012-13

Bench: Shri Amit Shukla & Shri Dr. B.R.R. Kumar

For Appellant: S/Shri Pradeep Dinodia & R.KFor Respondent: Date of hearing

ITA 1704/DEL/2015[2012-13]Status: DisposedITAT Delhi30 Jul 2021AY 2012-13

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G” NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI Dr. B.R.R

Ajay Enterprises Pvt. Ltd., New Delhi vs. DCIT, New Delhi

Appeal is dismissed and appeal of the assessee in ITA No

Bench: Shri Amit Shukla & Shri Dr. B.R.R. Kumar

For Appellant: S/Shri Pradeep Dinodia & R.KFor Respondent: Date of hearing

ITA 5776/DEL/2014[2011-12]Status: DisposedITAT Delhi30 Jul 2021AY 2011-12

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G” NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI Dr. B.R.R

DCIT, New Delhi vs. M/S. Ajay Enterprises Pvt. Ltd., New Delhi

Appeal is dismissed and appeal of the assessee in ITA No

Bench: Shri Amit Shukla & Shri Dr. B.R.R. Kumar

For Appellant: S/Shri Pradeep Dinodia & R.KFor Respondent: Date of hearing

ITA 1349/DEL/2013[2009-10]Status: DisposedITAT Delhi30 Jul 2021AY 2009-10

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G” NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI Dr. B.R.R

DCIT, New Delhi vs. M/S Ajay Enterprises Pvt. Ltd., New Delhi

Appeal is dismissed and appeal of the assessee in ITA No

Bench: Shri Amit Shukla & Shri Dr. B.R.R. Kumar

For Appellant: S/Shri Pradeep Dinodia & R.KFor Respondent: Date of hearing

ITA 1617/DEL/2020[2016-17]Status: DisposedITAT Delhi14 Jul 2021AY 2016-17

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G” NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI Dr. B.R.R

Dish Infra Services Private Limited, Noida vs. ACIT Circle-7(2), New Delhi

In the result appeal of the assessee is allowed with above directions for statistical purposes

Bench: Shri Kul Bharat & Shri Prashant Maharishi(Through Video Conferencing) Dish Infra Services Pvt. Ltd, Vs. Acit, Fc-09, Film City, Sector-16A, Circle-7(2), Noida, Uttar Pradesh New Delhi Pan: Aaacx1546R (Appellant) (Respondent)

For Appellant: Shri Dibya Prashant Singh, AdvFor Respondent: Shri Mahesh Thakur, Sr. DR

Section 106Section 115BSection 139ASection 250Section 68Section 8

parties. Many of the parties are the respective guesthouses of various companies or other organisations. Therefore, it is apparent that these parties are the trade creditors of the assessee. However the assessee has failed to produce even the Ledger account of these parties before the learned CIT – A. If these ... trade creditors claimed by the assessee that in subsequent years the sales should have been accounted for in these accounts. If, the sales has been accounted for out of these sundry credits, then the addition u/s 68 of the act would result in to double addition. It is also

ACIT, Central Circle-19, New Delhi vs. Nilkanth Concast Pvt. Ltd., Gujrat

The appeal of the revenue is dismissed

ITA 5909/DEL/2017[2010-11]Status: DisposedITAT Delhi06 Jul 2021AY 2010-11

Bench: Sh. Kul Bharatdr. B. R. R. Kumar(Through Video Conferencing) Ita No. 5909/Del/2017 : Asstt. Year : 2010-11 Acit, Vs Nilkanth Concast Pvt. Ltd., Central Circle-19, Survay No. 221, Village New Delhi-110055 Vadala, Mundra, Kutch, Gujarat-370410 (Appellant) (Respondent) Pan No. Aabcn8500A Assessee By : Sh. Arvind Kumar, Adv. Revenue By : Ms. Rinku Singh, Sr. Dr Date Of Hearing: 24.06.2021 Date Of Pronouncement: 06.07.2021

For Appellant: Sh. Arvind Kumar, AdvFor Respondent: Ms. Rinku Singh, Sr. DR

Section 115J

absence of any evidence furnished by the assessee before him. 5. During the First Appellate proceedings, the assessee submitted that these three parties were trade creditors from whom the assessee had purchased raw material in the goods were supplied to them and provided all the documentary evidences. The same have

The ACIT-5(1), Indore vs. M/S. Sunderdeep Construction Pvt. Ltd., Indore

In the result all the grounds raised by the Revenue are

ITA 380/IND/2017[2012-13]Status: DisposedITAT Indore25 Mar 2021AY 2012-13

Bench: Hon’Ble Kul Bharat & Hon’Ble Manish Boradassessment Year 2012-13

Section 143(2)Section 143(3)Section 40A(3)Section 41(1)(a)Section 68

ITAT in the case of ITO Vas Rajedra Kumar Taparia, 106 TT J 712 (Jodh.) has heId that "cash credits standing in the names trade creditors, all income·tax Assesees could not be treated as non. genuine when they have confirmed the transactions by filing affidavits and deposing before

ITO, New Delhi vs. M/S. Elative Building Solutions Pvt. Ltd., New Delhi

In the result, appeal of assessee is allowed

ITA 2498/DEL/2017[2012-13]Status: DisposedITAT Delhi24 Mar 2021AY 2012-13

For Appellant: Shri Sudesh Garg, AdvocateFor Respondent: Shri Jagdish Singh, Sr. DR

discussed above. 8.4 We further note that during the appellate proceedings, the Assessee's AR has filed the copies of ledger accounts of eleven trade creditors to whom the shares were, issued to settle their outstanding liabilities. The software supplied by such creditors share holders to the assessee company were

ACIT, Central Circle- 19, New Delhi vs. Amq Agro India Pvt. Ltd., New Delhi

In the result, both the appeals of the assessee are partly allowed and both the appeals of the revenue are dismissed

ITA 4409/DEL/2018[2014-15]Status: DisposedITAT Delhi22 Jan 2021AY 2014-15

Bench: Sh. H. S. Sidhudr. B. R. R. Kumar(Through Video Conferencing) Ita No. 2805/Del/2018 : Asstt. Year : 2013-14 Ita No. 2806/Del/2018 : Asstt. Year : 2014-15 M/S Amq Agro India Pvt. Ltd. Vs Asstt. Commissioner Of Income C-134, Ground Floor, Defence Tax, Central Circle-19, Colony, New Delhi-110024 New Delhi (Appellant) (Respondent) Pan No. Aaeca0929M

For Appellant: Sh. Sh. Hiren Mehta, CA &For Respondent: Ms. Pramita M. Biswas, CIT DR

ITA 4408/DEL/2018[2013-14]Status: DisposedITAT Delhi22 Jan 2021AY 2013-14

other hand, appellant has submitted that the payments in respect of all the purchases as well as misc. expenses were outstanding on 31.03.2014 as trade creditors and payments to these creditors were made subsequently during the next financial year and finally no outstanding balance remained ... profit or gains of business by way of remission or cessation of these liabilities in the hands of appellant. In such situation, when the trade creditors belong to the purchases made or expenses incurred during the year which have been accounted for in the books of account and payments

DCIT, Central Circle- 19, New Delhi vs. Amq Agro India Pvt. Ltd., New Delhi

In the result, both the appeals of the assessee are partly allowed and both the appeals of the revenue are dismissed

For Appellant: Sh. Sh. Hiren Mehta, CA &For Respondent: Ms. Pramita M. Biswas, CIT DR

ITA 2806/DEL/2018[2014-15]Status: DisposedITAT Delhi22 Jan 2021AY 2014-15

Amq Agro India Pvt. Ltd., New Delhi vs. ACIT, Central Circle- 19, New Delhi

In the result, both the appeals of the assessee are partly allowed and both the appeals of the revenue are dismissed

For Appellant: Sh. Sh. Hiren Mehta, CA &For Respondent: Ms. Pramita M. Biswas, CIT DR

ITA 2805/DEL/2018[2013-14]Status: DisposedITAT Delhi22 Jan 2021AY 2013-14

Amq Agro India Pvt. Ltd., New Delhi vs. ACIT, Central Circle- 19, New Delhi

In the result, both the appeals of the assessee are partly allowed and both the appeals of the revenue are dismissed

For Appellant: Sh. Sh. Hiren Mehta, CA &For Respondent: Ms. Pramita M. Biswas, CIT DR