Sundry Creditors arising out of Hawala-Linked Bogus Purchases: Income Tax Treatment 

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. 

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