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In the context of AO’s possible act to make addition for unverifiable sundry creditors the tribunal in (2022] 29 ITR (Trib)-OL 25 (ITAT[Del) held that once trading results are accepted by the AO, no further addition can be made for sundry creditors under section 68 of the Act. In so pointing the bench reaffirmed the fact that when the AO has accepted the trading results, it is deemed that he has verified and inquired the sundry creditors/debtors.

In this case the Commissioner is prevented from taking any action u/s 263 only on the pretext that no inquiries are conducted by the AO to verify creditors and debtors.

Taxpayers may therefore take a ground of appeal specific to this subject and argument in their appeal against any addition for sundry creditors.

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