9911796707
TMI Blog1961 (3) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... ase that he went to Madras in January, 1955, to sell government promissory notes through Dalal Co., stock brokers, sold government securities through that company and obtained a cheque for ₹ 20,790. He encashed it and went to the Madras Central station that evening to entrain for Proddatur, and at the station he was pick-pocketed. He immediately gave a complaint to the police but the money said to have been lost was not found on the person charge-sheeted in that behalf. The assessee claimed this loss of ₹ 20,700 as an allowable deduction from out of the business profits. The Income-tax Officer disallowed the claim, as he felt that this loss could not be regarded as a revenue loss arising in the course of his carrying on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnection between the loss and the business would not bring the loss within the expression loss incidental to the business . It should spring directly from the carrying on of the business and be incidental to it. The loss should be inseparable from the business. Applying this test to the present case, we must hold that the loss was not incidental to or one arising out of the business. It could not be posited that it was absolutely necessary for the assessee to cash the cheque issued and to carry the money on his person. It is only when it could be posited that it was part of his business to take money with him that it could be said that the loss was incidental to his business. This opinion of ours gains support from the judgment of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the amount thus lost by the assessee could be properly claimed as an admissible deduction in computing the profits of the assessee from business for purpose of income-tax. It was laid down by their Lordships inter alia that when once it was shown that the agent was in charge of the business and there was authority to operate the bank accounts and the withdrawal of monies was in the purported exercise of authority, his action could be referred to his character as agent and the loss resulting from misappropriation of funds was incidental to the carrying on of the business. We cannot see how this ruling affords any analogy here. As pointed out by their Lordships, it was in the course of his business that the assessee had conferred certain po ..... X X X X Extracts X X X X X X X X Extracts X X X X
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