Creditors wrongly added back in the Income

In case of one of my clients, the IT department has wrongly added back creditors in the Income. However, the creditors were genuine and has been paid off during the course of the proceedings. We have attached the copy of the cheque and bank statement of both the parties in our reply. Can anyone help us with the case law in favour of the assessee?
Replies (2)
Quick Summary
A client's IT department incorrectly added genuine creditors back into their income, even though these debts have since been settled. Evidence like cheque copies and bank statements has been provided. The discussion seeks case law to support the assessee's position, particularly when TDS has been deducted appropriately. Advice suggests appealing the AO's order if creditors are legitimate.

If tds is deducted wherever applicable then IT dept can't add back the creditors/ exp to total income unless it is reported in the tax audit report

If the creditors are genuine, then file an appeal against the order of AO.

In case of any further queries, kindly mail me at casoravgupta @ gmail.com

Thanks & Regards
CA. Sorav Gupta
(Practicing Chartered Accountant)

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