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Sundry Creditors arising out of Hawala-Linked Bogus Purchases: Income Tax Treatment
Case Law Details
- Case Name
- Rajesh G. Jain Vs ITO (ITAT Mumbai)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Related Assessment Year
- 2010-11
- Courts
- All ITAT, ITAT Mumbai
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Rajesh G. Jain Vs ITO (ITAT Mumbai)
Sundry creditors arising out of Bogus purchases (Hawala Transactions) and remaining outstanding as at the year-end cannot be added to the Total Income u/s 68 as Cash credits.
Such creditors can be added u/s 41(1) only as Income to include benefit due to Remission or Cessation of Liability by way of writing off such liability in his accounts.
Relevant part of the ITAT Mumbai D Bench Order dated 29-12-2023
“178. ….. There may be a few exceptions to this general rule. For example, in the case of credit purchases, the account of the supplier is credite...
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