9911796707
TMI Blog2020 (3) TMI 390X X X X Extracts X X X X X X X X Extracts X X X X ..... pes of gold and diamond jewellery under the name and style of M/s. Sai Jewels. For the assessment year 2012-13, assessee had filed its return of income on 13.06.2012 declaring total income of Rs. 4,87,370/-. Assessment u/s. 143(3) was, however, complete at an income of Rs. 64,53,540/- making certain additions including addition of Rs. 45 lacs on account of sundry creditors. 3. Aggrieved by such addition, the assessee preferred appeal before the ld. CIT(A) and by way of the impugned order, ld. CIT(A) deleted other additions but confirmed the addition of Rs. 40 lacs out of Rs. 45 lacs added by the Assessing Officer u/s. 28 read with section 41 of the Income-tax Act ("the Act"). 4. The assessee is, therefore, before us in this appeal conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Hon'ble Apex Court in the case of CIT vs. Mahindra & Mahindra Ltd., 404 ITR 1 (SC), section 28 of the Act has no application since the alleged benefit of the assessee is not in the nature of cash or money and section 41(1) has also no application since there was no cessation of any trading liability. 6. Per contra, it is the submission on behalf of the Revenue that the assessee did not produce any purchase voucher before the Assessing Officer to substantiate his claim and further that there was no rebuttal of the observation of the Assessing Officer that the rates on which the assessee had shown to have purchased the gold from his father on 01.03.2012, 03.03.2012 and 17.03.2012 also vary as the rate on which the gold is claimed to have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ullions and all types of gold and diamond jewellery under the name and style of M/s. Sai Jewels. During the year under consideration, the assessee has declared Gross Turnover at Rs. 71,34,82,470/- and Gross Profit of Rs. 22,04,057/- yielding G.P. rate of 0.22%. After debiting expenses in P&L account, the Net Profit of Rs. 4,93,828/- has been declared. The details furnished with respect to trading results supported with bills and vouches were examined and placed on record." 9. The entire question in this matter revolves around whether the liability of the assessee towards the gold of his father introduced into the business of assessee ceased to exist or not. According to assessee, he alone is not entitled to inherit the entire estate of hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into the business of assessee took place in the assessment years 2011-12 and 2012-13 only. 11. In Mahindra & Mahindra Ltd. (supra), Hon'ble 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. We, therefore, are of the considered opinion that such an act cannot be termed either as introduction of unaccounted or unexplained money into the capita ..... X X X X Extracts X X X X X X X X Extracts X X X X
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