9911796707
TMI Blog2024 (9) TMI 271X X X X Extracts X X X X X X X X Extracts X X X X ..... to claim the loss if it has a proximate connection with its business. Hence, it is settled law that the loss arising by embezzlement/robbery of money by a stranger to the business is also a trading loss and the loss is liable to be allowed as deduction provided the loss is incidental to the normal operation of the business. The arguments, advanced by the DR for the revenue to the effect that no quantitative details in the FIR is mentioned and the assessee does not have any cogent documents and evidences to claim loss, is not acceptable, particularly considering the above facts, that assessee had submitted police reports related to the robbery and FIR and apart from this assessee submitted newspaper clippings also. Thus we allow the loss suffered by robbery and delete the balance loss. Assessee s appeal is allowed. - DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER AND SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER For the Assessee : Shri Mehul Ranpura, AR For the Revenue : Shri Ahish Kumar Pandey, Sr. DR ORDER PER ARJUN LAL SAINI, AM: The captioned appeal filed by the assessee, pertaining to Assessment Year 2015-16, is directed against the order passed by the Learned Commissioner of Income Tax ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e thereto, the assessee filed written submission, before assessing officer, on 15.12.2017 stating as under: Regarding justification as to opening stock of gold robbery of Rs. 1,93,17,398/- is allowable expenses during the year, it is submitted that robbery was happened on 17.02.2014 morning. Immediately, we had reported the same to Police Department. Copy of First Information Report and newspaper cutting are attached at Page 10 to 14. We hoped to recover lost goods through police department. Subsequently robbers were caught by Police Department but could not recover anything from him. And therefore on finalization of event we had written of the same in the books of account. Therefore, it is requested to allow the same as business expenditure and oblige. We have furnished the details as above and hope that same will satisfy your requirement. However, kindly grant us an opportunity of furnishing further details in case required before taking any adverse decision in the matter and oblige. 4. However, the assessing officer rejected the above contention of the assessee and observed that robbery was happened on 17.02.2014, which is pertaining to Financial year (F.Y.) 2013-14 and relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing account in the year of event, though it appears in the balance sheet for the year 2014-15 under the head 'Gold Robbery'. The robbery loss was not debited to the trading account in the year ended 31.03.2014, as at initial stage the robbers / conspirators were apprehended and there was hope for recovery gold. The ld. Counsel contended that the loss by robbery must be deemed to have arisen when the assessee came to know that the amounts robbed could not be recovered, and in the assessee s case under consideration, the assessee came to know in the assessment year 2015-16 and therefore debited the entire amount in the profit and account in the assessment year 2015-16. Hence, loss by robbery should be allowed to the assessee. 8. On the other hand, the Ld.DR for the Revenue, argued that Ld.CIT(A), has partly allowed the addition made by the assessing officer, (AO) based on the documents and evidences and for balance amount, the assessee did not have sufficient evidences. The Ld.DR also pointed out that assessee has not submitted quantitative details of gold robbed and there are no quantitative details in the FIR. The quantitative details of books of accounts, should be tallied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per assessee, these articles seized are under the possession of the police Department. Since partial robbed material has been recovered, it was hoped by the assessee that they would get balance amount in future. Thus, robbed gold/jewellery remain un-quantified at the end of the accounting year, and relating to (financial year) 2013-14, and to be specific till the due date of filing of return of income for assessment year (A.Y.) 2014-15, therefore, while finalizing the accounts for the year ending 31.03.2014, the assessee has shown the said stock of Rs. 1,93,17,398/- under the head Gold Robbery in the trading account, which was part and parcel of the return of income for assessment year (A.Y.) 2014-15. Copy of trading account, balance sheet as on 31.03.2014 are filed by the assessee, vide paper book Page 24 to 25. 10. From the above narrated facts, it is vivid that event of robbery is not in dispute. That is, there was robbery in the assessee's case under consideration. However, the dispute before us is that how much amount is to be allowed as deduction on account of loss by robbery. We find that further investigation was under process; by Police, however, there was no desir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ible efforts to recover the loss occurred due to theft/ embezzlement, etc. It has been held by the Hon'ble Allahabad High Court in U.P. Vanaspati Agency v. CIT (1968) 68 ITR 120 (All) that a dispossessing would become loss only after the recovery becomes of impossible or the chances of recovery become very remote. The Hon'ble Supreme Court in Ramchander Shivnarayan vs. CIT (1978) 111 ITR 263, has held that it is open to the assessee to claim the loss if it has a proximate connection with its business. Hence, it is settled law that the loss arising by embezzlement/robbery of money by a stranger to the business is also a trading loss and the loss is liable to be allowed as deduction provided the loss is incidental to the normal operation of the business. The arguments, advanced by the ld. DR for the revenue to the effect that no quantitative details in the FIR is mentioned and the assessee does not have any cogent documents and evidences to claim loss, is not acceptable, particularly considering the above facts, that assessee had submitted police reports related to the robbery and FIR and apart from this assessee submitted newspaper clippings also. 12. On identical facts, we ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
