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Issues Involved:
1. Whether any theft has been committed from the premises of the assessee in respect of the stock worth Rs. 51,02,069? 2. Whether the addition of Rs. 21,39,950 in the trading account made by the AO/deleted by the CIT(A) was justified? 3. Whether the assessee is entitled to claim a loss of Rs. 51,02,069 debited as 'insurance claim rejected' in the P&L a/c in the asst. yr. 1992-93? Issue-wise Detailed Analysis: 1. Whether any theft has been committed from the premises of the assessee in respect of the stock worth Rs. 51,02,069? The Tribunal analyzed the evidence presented by both parties. The assessee lodged an FIR about the theft, which was later reported as untraceable by the police. However, two independent surveyors appointed by the insurance company conducted detailed inquiries and concluded that no theft had occurred. They based their findings on statements from various witnesses, the feasibility of the theft logistics, and discrepancies in the stock records. The Tribunal found no serious flaws in these survey reports and concluded that no theft had been committed from the premises of the assessee. Therefore, the issue was decided against the assessee and in favor of the Revenue. 2. Whether the addition of Rs. 21,39,950 in the trading account made by the AO/deleted by the CIT(A) was justified? The AO made an addition of Rs. 21,39,950 by applying a GP rate of 29.15% on the value of goods allegedly sold outside the books. The Tribunal noted that the assessee had not claimed the loss of Rs. 51,02,069 in the assessment year under reference but included it in the closing stock as 'claim receivable.' The Tribunal directed the AO to recompute the addition, considering the value of goods manufactured and reducing the amount shown in the closing stock. The GP rate should be recomputed by including the agreed addition of Rs. 12 lakhs on account of low GP. The Tribunal set aside the order of the CIT(A) and directed the AO to recompute the addition in accordance with their observations. The ground of appeal was treated as allowed. 3. Whether the assessee is entitled to claim a loss of Rs. 51,02,069 debited as 'insurance claim rejected' in the P&L a/c in the asst. yr. 1992-93? The Tribunal held that the loss claimed by the assessee does not survive as it was based on the finding that no theft had occurred. Even if the claim was genuine, the loss should have been claimed in the asst. yr. 1991-92 when the insurance company rejected the claim on 3rd Jan., 1991. The Tribunal referred to its earlier decision in a similar case where the loss was allowed in the year it occurred, irrespective of subsequent litigation. Therefore, the assessee was not entitled to claim the loss in the asst. yr. 1992-93. The issue was decided in favor of the Revenue and against the assessee. Conclusion: Both appeals filed by the Revenue were allowed. The Tribunal concluded that no theft had occurred, justified the addition of Rs. 21,39,950 in the trading account, and held that the assessee was not entitled to claim the loss of Rs. 51,02,069 in the asst. yr. 1992-93.
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