Section 41(1) addition for difference in sundry creditors without reasoning: ITAT remands issue back to AO

Jonna Iron Mart Vs ACIT (ITAT Hyderabad)

Background: The case involves Jonna Iron Mart, a partnership firm engaged in trading iron and steel, which filed its return for the Assessment Year (A.Y.) 2017-18 declaring a total income of ₹31,98,300. During scrutiny, the Assessing Officer (AO) noted discrepancies in the sundry creditors’ balances. The firm’s balance sheet as of 31.3.2017 showed sundry creditors at ₹24,58,14,826. Upon verifying the account copies provided by the assessee, the AO observed differences between the creditors’ closing bal

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