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TMI Blog2020 (11) TMI 732X X X X Extracts X X X X X X X X Extracts X X X X ..... surance Co. Therefore the loss claimed by the assessee is a contingent loss - HELD THAT:- Merely because the assessee has an insurance, it does not mean that assessee has not incurred the loss during the year. Moment the insurance Co determines the loss in terms of the insurance policy obtained by the assessee from the insurance company, naturally the assessee would be reimbursed or compensated for the same. It does not mean that assessee has not incurred the losses. The accident of fire at the premises of the assessee in which it has lost goods due to the fire is one incident. The action of the assessee of obtaining the insurance is altogether a different act to mitigate the loss incurred by the assessee. The claim of the insurance o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he action of the ld AO in making disallowance of ₹ 5,24,06,053/- on account of loss due to fire and that too by invoking section 29 of the Income Tax Act, 1961 whereas the same deserves to be allowed. 2. That in any case and in any view of the matter, action of the ld CIT(A) in confirming the action of the ld AO in making disallowance of ₹ 5,24,06,053/- and too by invoking section 29, is bad in law and against the facts and circumstances of the case and without appreciating/ considering the submissions of the assessee. 3. That having regard to the facts and circumstances of the case, the ld CIT(A) has erred in law and on facts in confirming the action of the ld AO in charging interest u/s 234A, 234B, 234C and 234D of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a deduction to the assessee. The learned assessing officer held that assessee stocks were insured against damages including damage by fire by the National insurance Co Ltd and therefore the loss incurred by the assessee on account of fire is recoverable under a contract of indemnity i.e. insurance, against the damage from insurance Co and the claim of the assessee has not been decided till date by the insurance Co. Therefore the loss claimed by the assessee is a contingent loss and is not allowable as a deduction in the profit and loss account. The assessing officer issued notices under section 133 (6) of the act to the insurance Co to know the exact status of the claim of the assessee which was replied by the insurance company on 1/11/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above fire. Accordingly on 6 December 2014 the assessee submitted requests to the insurance Co for survey of the assessee s loss. Assessee has also filed the first information report on 15/12/2014. He further referred to the details of the stock which was lying in the warehouse. The stock claimed to have been lost was also supported by the detailed inventory chart. Thus, the learned authorised representative submitted that assessee has incurred the loss during the year of the stock lying in the above warehouse, therefore such loss should be allowed to the assessee as a deduction while computing the profits and gains of the business of the assessee. The assessee relied upon the several judicial precedents. He further submitted that merely b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he rival contention and perused the orders of the lower authorities. Admittedly, fire occurred during the year, the traded goods of the assessee are lost during the year due to fire. Such traded goods were the stock in trade of the assessee. Undoubtedly, the traded goods were insured with the insurance Co for any loss due to fire. But merely because the assessee has an insurance, it does not mean that assessee has not incurred the loss during the year. Moment the insurance Co determines the loss in terms of the insurance policy obtained by the assessee from the insurance company, naturally the assessee would be reimbursed or compensated for the same. However, it does not mean that assessee has not incurred the losses. The accident of fire a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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