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Ad-Hoc 10% Addition on Sundry Creditors Struck Down
Case Law Details
- Case Name
- Vimal Mishra Vs ITO (ITAT Varanasi)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Related Assessment Year
- 2014-15
- Courts
- All ITAT, ITAT Varanasi
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Vimal Mishra Vs ITO (ITAT Varanasi)
Ad-hoc Addition on Sundry Creditors Deleted — Estimation at 10% Held Unsustainable
The Varanasi SMC Bench of the ITAT allowed the assessee’s appeal and deleted the addition of ₹3.38 lakh made on account of alleged unverifiable sundry creditors.
The Assessing Officer had made an ad-hoc disallowance at 10% of total sundry creditors without identifying any specific bogus creditor or pointing out defects in the books. The CIT(A) mechanically confirmed the addition.
The Tribunal observed that:
The addition was based purely on surmises, guesswork, and estim...
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