Sec. 145 of Income-tax Act, 1961— Rejection of Accounts— As the assessee has produced all relevant details available with respect to sundry creditors and other expenses outstanding and AO has not made any enquiry to prove that these are non-genuine liabilities, the addition in the hands of the assessee cannot be sustained.

Facts: Ground of the appeal is with respect to the addition of INR 4,65,78,484 being the sundry creditors and INR 6,98,13,499 being the value of the balance sheet item of the other liabilities to the total income of the assessee.

Held, that assessee has submitted the complete list of all the creditors along with their addresses and amounts involved before the AO. Further the assessee also submitted the copies of the ledger accounts and the entire bills in relation to those creditors was all of also furnished before the AO to all the creditors the assessee has made payments through account payee cheques and the bank statement was also submitted before the learned AO. AO without verifying all these details have made the addition. In most of the creditors, the assessee is also deducted tax at source. Even otherwise, when AO has disallowed all the expenditure the further disallowance of the sundry creditor does not arise at all. With respect to the other liabilities, assessee has furnished the details of those outstanding expenses. The major amount of sundry creditors involved payment of custom charges, duties and freight and cartages payable which are related to the import and export of equipments and those expenses already paid by the other party on behalf of the assessee and therefore the same are in fact standing to the credit of that party. The assessee also submitted the documents relating to the customs duty payable on import and export of the above equipments. AO has disallowed/added the above sum without making any enquiry to substantiate his belief that these are non-genuine liabilities. As the assessee has produced all relevant details available with respect to the above sundry creditors and other expenses outstanding and AO has not made any enquiry to prove that these are non-genuine liabilities, the addition in the hands of the assessee cannot be sustained. Accordingly, we direct the AO to delete the disallowance with respect to sundry creditors and towards the other expenses outstanding as liabilities. - GL LITMUS EVENTS (P) LTD. V/s ASSTT. CIT - [2020] 205 TTJ 207 (ITAT-DELHI)