Time limit to pay to Unpaid Creditors under income tax act

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Pankaj (Querist)
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21 October 2021 Respected sir,
Actually I had shown sundry creditors of Rs 1000000/- in F Y 18-19. But still I have not paid them.
Is any time limit to pay to unpaid creditors under income tax ?
If i will not pay to them to some more years , what will the effect ?
Is any rule to add such unpaid creditors amount to income ?

Please give your valuable response

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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22 October 2021 1.As such no.
2. Will continue to reflect in Balance Sheet, until you add back it to P&L acc.
3. ITO may impose sec. 41(1) of it act, and add the amount to income.

Pankaj

Pankaj (Querist)
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22 October 2021 Thanks sir
but any time limit u/s 41(1) to add the same amt in income ?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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22 October 2021 Usually during scrutiny, if reason for the non-payment not satisfactorily replied.
No specific time limit in the act, but roughly after 7/8 years...

Pankaj

Pankaj (Querist)
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22 October 2021 Thanks Sir.
Thanku very much

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