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2020 (3) TMI 390 - AT - Income TaxCessation of liability in respect of his father’s gold that was purchased during the year - gold introduced by the assessee into the business belonged to his father on whose death it was inherited by mother, brothers and sister of the assessee - HELD THAT:- As rightly contended by the ld. AR, inasmuch as the other legal heirs are available and the debt is acknowledged in the books of account of the assessee, it cannot be said that the liability ceased to exist. As a matter of fact, it cannot be said that such a liability ceased to exist on the death of assessee’s father because the father of assessee died way back in the year 1993 and the introduction of gold of father into the business of assessee took place in the assessment years 2011-12 and 2012-13 only. In Mahindra & Mahindra Ltd. [2018 (5) TMI 358 - SUPREME COURT] clearly held that unless the benefit accrued to the assessee is in nature of cash or money, section 28 has no application and in the absence of cessation of liability, section 41(1) has no application. What all that happened in this matter is that the assessee introduced the gold left behind by his father into his business and had shown the trade liability in his own name in the name of other family as a whole or individual legal heir. Such an act cannot be termed either as introduction of unaccounted or unexplained money into the capital or that the trade liability ceased to exist. For these reasons, we find it difficult to sustain the addition made by the Assessing Officer and confirmed by the ld. CIT(A). Ground of appeal is accordingly allowed.
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