Ad-Hoc 10% Addition on Sundry Creditors Struck Down

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...