M.s Hitkari Industries Ltd v. ACIT-Circle10(1) Delhi

Judgement held

Assessee submitted :-
(1) Trade creditors backed by recorded and consumed purchases are not 'cash credits' u/s 68; missing confirmations alone do not make them bogus.
(2) For interest-free advances to group concerns, show business nexus (agreements, lease, job work) and own funds exceeding the advance: Reliance Utilities presumption, S.A. Builders.
(3) A provision written back that was never debited to P&L can be reduced from MAT book profit. Revenue lost here because it did not rebut the CIT(A)'s factual findings.

Brief history

AO added Rs 4.00 crore of unverified sundry creditors, disallowed Rs 20.84 lakh interest u/s 36(1)(iii) on an interest-free advance to a group concern, and refused a Rs 64.33 lakh write-back reduction in MAT book profit. CIT(A), after reconciliation and remand, restricted the creditors addition to 20% of the Rs 2.15 crore still disputed (Rs 43 lakh), deleted the interest disallowance (business nexus and own funds), allowed the MAT adjustment, and allowed 80-IB/80-IA. ITAT upheld everything and dismissed both appeals.

Reproduced from the order of the Income Tax Appellate Tribunal, Delhi Bench, in 3095/Del/2026, pronounced 21 Oct 2026. Source: itat.gov.in. The notes above are an editorial summary; read the full order before relying on it. Order No. Sh. Satvir singh Godara JM and Sh. Navee.