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2023 (7) TMI 651 - AT - Income TaxModification of assessment order by CIT(A) - Addition of remission of liabilities u/s 41(1) rather than sec 68 - CIT(A) sustained the impugned addition by invoking the provision of section 41(1) without giving any notice to the assessee - HELD THAT:- As per section 251(1)(a), Ld.CIT(A) is empowered in an appeal against the order of assessment to confirm, reduce, enhance, annul the assessment but it does not speak of modification of the order. In the present case, Ld.CIT(A) in essence has modified the assessment order by sustaining the addition u/s 41(1) of the Act instead of section 68 of the Act. Therefore, in our considered view, Ld.CIT(A) travelled beyond the jurisdiction conferred by the Act. Moreover, both the Authorities have failed to take note of the binding judgement of Shri Vardhman Overseas Ltd [2011 (12) TMI 77 - DELHI HIGH COURT] as concentrated on applicability of Clause (a) of sub-section (1) of Section 41 and as to what constitute remission or cessation of a trading liability. It may be noted that in the present case, the assessee has not unilaterally written back the accounts of the sundry creditors in its profit and loss account. In the present case, the AO as well as Ld.CIT(A) have recorded the fact that the creditors are outstanding for more than 02 years. However, in the case of CIT vs Sugauli Sugar Works Pvt.Ltd. [1999 (2) TMI 5 - SUPREME COURT] as recorded that the liabilities were existing for more than 20 years. Therefore,we are of the considered view that the authorities below were not justified in making the impugned addition. We therefore, direct the AO to delete the addition. Grounds raised by the assessee are thus, allowed.
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