9911796707
|
Home
Issues involved:
The judgment involves questions regarding the disallowance of embezzlement loss, commission paid to directors as perquisite, and motor car expenses for personal use. Embezzlement Loss (Assessment Year 1977-78): The assessee claimed a loss of Rs.13,40,000 due to embezzlement by an employee. The Income-tax Officer disallowed the claim stating the extent of loss was unknown. The Commissioner (Appeals) allowed a deduction of Rs.6,20,000, considering recoverable and unrecoverable parts. The Tribunal, citing a circular, held that the loss must be incidental to business and deductible in the year discovered. Referring to a Supreme Court decision, the Tribunal found the loss was not allowable as recovery prospects existed till a compromise in 1980. The High Court allowed the deduction as the loss was discovered in the relevant year. Commission Paid to Directors (Assessment Years 1979-80 and 1980-81): The Tribunal did not allow the commission paid to directors as perquisite under section 40(c) of the Act. The assessee did not press this question further. Motor Car Expenses (Assessment Years 1977-78, 1979-80, and 1980-81): The Tribunal held that a sum of Rs.20,000 from motor car expenses in each assessment year was not disallowable for personal use. The Tribunal also allowed depreciation claimed by the assessee on the motor car. The High Court answered the questions in favor of the assessee regarding the embezzlement loss and the motor car expenses, while the question regarding commission paid to directors was not pressed further. The judgment referred to a previous decision for the answers provided.
|
