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TMI Blog1983 (4) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... ? " The facts are not in controversy. The assessee deals in grains and groceries. The assessee sent the munim, Shri Shib Paul, to Ranchi on September 12, 1969, with cash amounting to Rs. 10,025 for making purchase of some grocery articles and for making payment of some outstanding dues to some of the constituents. The maxim made certain purchases from various firms and sent the same to the assessee by truck on September 20, 1969. According to the assessee, the maxim, Shri Shib Paul, informed that he would be coming back shortly and when he did not turn up on September 30, 1969, the assessee contacted the parties at Ranchi and learnt that payments were not made to them. The assessee lodged a report with the police on October 2, 1969, afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g in para. 8 of its judgment that : "The fact that the assessee's business required purchasing of goods from outstation parties when employees were sent with huge cash cannot be denied. He has to place reliance for such work on old employee. The said maxim was in service for over 7 years and was drawing salary of Rs. 250 per month. On earlier occasion also he has gone for such work. The factum of loss has also been proved inasmuch as the assessee has lodged a F.I.R. with the police on 2-10-69 only shortly after the incident.. Merely because the assessee has not taken any step to recover, it cannot be said to be a ground for not allowing such item as a business loss." On these facts, the question that arises for consideration is as to wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble deduction. It was in that context that those observations were made. That is not the point in question here. Here the only question is as to whether such a loss could be treated as a trading loss or not. It would bear repetition to say that in view of the decision of the Supreme Court in Badridas Daga v. CIT [1958] 34 ITR 10, it has to be treated as a trading loss, although under s. 28 of the Act corresponding to s. 10(1) of the 1922 Act. It is well settled that the loss sustained as a result of misappropriation by the agent was one which was incidental to the carrying on of the business and should, therefore, be deducted in computing the profits under s. 10(1) of the 1922 Act corresponding to s. 28 of the Act. We thus have no hesitat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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