On appeal, the Tribunal held that the assessee introduced the gold left behind by his father into his business and showed the trade liability in his own name and / or in the name of other family members as a whole or individual legal heir. Such an act could not be termed either as introduction of unaccounted or unexplained money into the capital nor could the trade liability be said to have ceased to exist. Further, unless the benefit accrued to the assessee is in nature of cash or money, S. 28(i) of the Act had no application and in the absence of cessation of liability, S. 41(1) had no application. Thus the addition under S. 28(i) of the Act read with Section 41 of the Act could not be sustained. (AY.2012-13)
Deepak Garg v. ITO (2020) 78 ITR 40 (SN.) (Delhi) (Trib)
S. 28(i) Business Income — Benefit or amenity arising from business — Remission or cessation of trading liability — Assessee introducing gold left behind by his father into his business and showing trade liability in his name and in name of other family as a whole or individual legal heir — AO accepting purchase of gold and approving trading results — Not a case of Assessee introducing unaccounted or unexplained money into capital or of a trade liability ceasing to exist. [S.41(1) ]