diff --git a/erpnext/stock/doctype/stock_entry/stock_entry.py b/erpnext/stock/doctype/stock_entry/stock_entry.py
index c68d1db..7721efb 100644
--- a/erpnext/stock/doctype/stock_entry/stock_entry.py
+++ b/erpnext/stock/doctype/stock_entry/stock_entry.py
@@ -2229,7 +2229,7 @@
 		return sorted(list(set(get_serial_nos(self.pro_doc.serial_no)) - set(used_serial_nos)))
 
 	def update_subcontracting_order_status(self):
-		if self.subcontracting_order and self.purpose == "Send to Subcontractor":
+		if self.subcontracting_order and self.purpose in ["Send to Subcontractor", "Material Transfer"]:
 			from erpnext.subcontracting.doctype.subcontracting_order.subcontracting_order import (
 				update_subcontracting_order_status,
 			)
diff --git a/erpnext/subcontracting/doctype/subcontracting_order/subcontracting_order.js b/erpnext/subcontracting/doctype/subcontracting_order/subcontracting_order.js
index c20f8ab..bbc58fe 100644
--- a/erpnext/subcontracting/doctype/subcontracting_order/subcontracting_order.js
+++ b/erpnext/subcontracting/doctype/subcontracting_order/subcontracting_order.js
@@ -107,9 +107,9 @@
 	get_materials_from_supplier: function (frm) {
 		let sco_rm_details = [];
 
-		if (frm.doc.supplied_items && (frm.doc.per_received == 100)) {
+		if (frm.doc.supplied_items && frm.doc.per_received > 0) {
 			frm.doc.supplied_items.forEach(d => {
-				if (d.total_supplied_qty && d.total_supplied_qty != d.consumed_qty) {
+				if (d.total_supplied_qty > 0 && d.total_supplied_qty != d.consumed_qty) {
 					sco_rm_details.push(d.name);
 				}
 			});
@@ -160,7 +160,7 @@
 		var me = this;
 
 		if (doc.docstatus == 1) {
-			if (doc.status != 'Completed') {
+			if (!['Closed', 'Completed'].includes(doc.status)) {
 				if (flt(doc.per_received) < 100) {
 					cur_frm.add_custom_button(__('Subcontracting Receipt'), this.make_subcontracting_receipt, __('Create'));
 					if (me.has_unsupplied_items()) {
diff --git a/erpnext/subcontracting/doctype/subcontracting_order/subcontracting_order.py b/erpnext/subcontracting/doctype/subcontracting_order/subcontracting_order.py
index 156f027..e6de72d 100644
--- a/erpnext/subcontracting/doctype/subcontracting_order/subcontracting_order.py
+++ b/erpnext/subcontracting/doctype/subcontracting_order/subcontracting_order.py
@@ -153,7 +153,7 @@
 			else:
 				self.set_missing_values()
 
-	def update_status(self, status=None, update_modified=False):
+	def update_status(self, status=None, update_modified=True):
 		if self.docstatus >= 1 and not status:
 			if self.docstatus == 1:
 				if self.status == "Draft":
@@ -162,6 +162,10 @@
 					status = "Completed"
 				elif self.per_received > 0 and self.per_received < 100:
 					status = "Partially Received"
+					for item in self.supplied_items:
+						if item.returned_qty:
+							status = "Closed"
+							break
 				else:
 					total_required_qty = total_supplied_qty = 0
 					for item in self.supplied_items:
@@ -176,7 +180,10 @@
 			elif self.docstatus == 2:
 				status = "Cancelled"
 
-			frappe.db.set_value("Subcontracting Order", self.name, "status", status, update_modified)
+		if status:
+			frappe.db.set_value(
+				"Subcontracting Order", self.name, "status", status, update_modified=update_modified
+			)
 
 
 @frappe.whitelist()
diff --git a/erpnext/subcontracting/doctype/subcontracting_order/subcontracting_order_list.js b/erpnext/subcontracting/doctype/subcontracting_order/subcontracting_order_list.js
index 650419c..aab2fc9 100644
--- a/erpnext/subcontracting/doctype/subcontracting_order/subcontracting_order_list.js
+++ b/erpnext/subcontracting/doctype/subcontracting_order/subcontracting_order_list.js
@@ -10,6 +10,7 @@
 			"Completed": "green",
 			"Partial Material Transferred": "purple",
 			"Material Transferred": "blue",
+			"Closed": "red",
 		};
 		return [__(doc.status), status_colors[doc.status], "status,=," + doc.status];
 	},
diff --git a/erpnext/subcontracting/doctype/subcontracting_order/test_subcontracting_order.py b/erpnext/subcontracting/doctype/subcontracting_order/test_subcontracting_order.py
index 94bb38e..098242a 100644
--- a/erpnext/subcontracting/doctype/subcontracting_order/test_subcontracting_order.py
+++ b/erpnext/subcontracting/doctype/subcontracting_order/test_subcontracting_order.py
@@ -7,7 +7,10 @@
 from frappe.tests.utils import FrappeTestCase
 
 from erpnext.buying.doctype.purchase_order.purchase_order import get_mapped_subcontracting_order
-from erpnext.controllers.subcontracting_controller import make_rm_stock_entry
+from erpnext.controllers.subcontracting_controller import (
+	get_materials_from_supplier,
+	make_rm_stock_entry,
+)
 from erpnext.controllers.tests.test_subcontracting_controller import (
 	get_rm_items,
 	get_subcontracting_order,
@@ -89,6 +92,16 @@
 		sco.load_from_db()
 		self.assertEqual(sco.status, "Partially Received")
 
+		# Closed
+		ste = get_materials_from_supplier(sco.name, [d.name for d in sco.supplied_items])
+		ste.save()
+		ste.submit()
+		sco.load_from_db()
+		self.assertEqual(sco.status, "Closed")
+		ste.cancel()
+		sco.load_from_db()
+		self.assertEqual(sco.status, "Partially Received")
+
 		# Completed
 		scr = make_subcontracting_receipt(sco.name)
 		scr.save()
diff --git a/erpnext/subcontracting/doctype/subcontracting_order_supplied_item/subcontracting_order_supplied_item.json b/erpnext/subcontracting/doctype/subcontracting_order_supplied_item/subcontracting_order_supplied_item.json
index a206a21..8f7128b 100644
--- a/erpnext/subcontracting/doctype/subcontracting_order_supplied_item/subcontracting_order_supplied_item.json
+++ b/erpnext/subcontracting/doctype/subcontracting_order_supplied_item/subcontracting_order_supplied_item.json
@@ -150,8 +150,7 @@
             "label": "Returned Qty",
             "no_copy": 1,
             "print_hide": 1,
-            "read_only": 1,
-            "hidden": 1
+            "read_only": 1
         },
         {
             "fieldname": "total_supplied_qty",
@@ -166,7 +165,7 @@
     "hide_toolbar": 1,
     "istable": 1,
     "links": [],
-    "modified": "2022-04-07 12:58:28.208847",
+    "modified": "2022-08-26 16:04:56.125951",
     "modified_by": "Administrator",
     "module": "Subcontracting",
     "name": "Subcontracting Order Supplied Item",
diff --git a/erpnext/subcontracting/doctype/subcontracting_receipt/subcontracting_receipt.json b/erpnext/subcontracting/doctype/subcontracting_receipt/subcontracting_receipt.json
index 84e9554..5cd4e63 100644
--- a/erpnext/subcontracting/doctype/subcontracting_receipt/subcontracting_receipt.json
+++ b/erpnext/subcontracting/doctype/subcontracting_receipt/subcontracting_receipt.json
@@ -369,7 +369,7 @@
             "in_standard_filter": 1,
             "label": "Status",
             "no_copy": 1,
-            "options": "\nDraft\nCompleted\nReturn\nReturn Issued\nCancelled",
+            "options": "\nDraft\nCompleted\nReturn\nReturn Issued\nCancelled\nClosed",
             "print_hide": 1,
             "print_width": "150px",
             "read_only": 1,
@@ -628,7 +628,7 @@
     "in_create": 1,
     "is_submittable": 1,
     "links": [],
-    "modified": "2022-08-22 17:30:40.827517",
+    "modified": "2022-08-26 21:02:26.353870",
     "modified_by": "Administrator",
     "module": "Subcontracting",
     "name": "Subcontracting Receipt",