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2023 (10) TMI 1098 - AT - Income TaxReopening of assessment - Addition on outstanding sundry creditors - reason to believe that there was cessation of liability which was income escaped to tax - information received from the DDIT (Inv) that the assessee has failed to repay the loan availed along with the other banks and has ceased off the liability and, hence, for the reason that income has escaped assessment, the case was reopened - CIT(A) upheld the order of the ld. A.O. for the reason that the assessee has failed to substantiate whether the outstanding liability to sundry creditors has ceased to exist - HELD THAT:- Jurisdictional High Court in the case of CIT vs. Jet Airways (I) Limited [2010 (4) TMI 431 - HIGH COURT OF BOMBAY] wherein it was held that the A.O. has to assess or reassess such income for which reopening was made along with any other income chargeable to tax which comes to the notice during the assessment proceeding and failure to make an addition on the grounds for which the reopening was done while passing the assessment order will make it null and void. AO cannot make an addition on any other income chargeable to tax without making an addition on the grounds for which the reopening was done. In the present case in hand, the ld. A.O. in the last paragraph of the reasons for reopening has belief that income has escaped assessment amounting to Rs. 86.00 crores in the form of cessation of liability along with any other income and the said amount being the loan taken from ADB by the assessee for which the repayment was not made resulting in cessation of liability. As observed that assessee has given the list of Sundry Creditors as on 31.03.2009 and onetime settlement offer given by the assessee to ADB had stated that the outstanding due - It is also evident from OTS offer that the assessee has paid interest and other charges to ADB as per the letter dated 28.09.2011 and has also undertaken to make payment subsequently. Both the A.O. as well as the first appellate authority has failed to elaborate as how they have arrived at the impugned addition - Hence, it is evident that the ld. A.O. has not made addition for the reason for which the reopening was made but had only made addition on the outstanding sundry creditor declared by the assessee. Appeal filed by the assessee is allowed.
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