TMI Blog2011 (5) TMI 206X X X X Extracts X X X X X X X X Extracts X X X X ..... Police or of the Insurance Company brought on record to disbelieve the allegation of theft - The fact that the police could not recover the goods or that the guilty persons were not punished cannot go against the claim of the assessee because for the in ability of the police to recover the stolen goods or to find out the culprit, the assessee cannot suffer - It is not a case where the report of the police is that the allegation of theft is baseless - therefore, set aside the finding of the Tribunal - Decided in favor of the assessee - ITA No.196 of 2001 - - - Dated:- 13-5-2011 - Mr. Justice Bhaskar Bhattacharya, Mr. Justice Raghunath Bhattacharya, JJ. For the Appellant: Mr. N.K. Poddar, Mr. Vineet Tibrewal, Mr. Dilip Kumar Kadel. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d) According to the assessee, a substantial quantity of raw materials supplied by the said customer was lost at the assessee s factory due to several thefts which took place during the financial years 1990-91 and 1991-92. Because of the repeated thefts during the financial year 1991-92 relevant to the Assessment Year 1992-93, the assessee took out insurance cover. e) As and when thefts were discovered, the assessee lodged complaints with the local police station. On some occasions, according to the assessee, persons armed with weapon entered the factory at night and took away the materials forcibly and sometimes they even hurled bomb. The Bally police station issued a notice under Section 173(2)(II) of the Cr.P.C. to the assessee confi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see for the balance sum of Rs.2,39,872/-. h) Although the assessee in the assessment proceeding for the Assessment year 1992-93 duly submitted all the relevant documents relating to the loss of the materials, correspondence with the customer, complaints lodged with the police and the report of the police, etc. in support of its claim for deduction of the said amount of Rs.4,57,777/- the Assessing Officer disallowed such claim. i) Being dissatisfied, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals) who by an order dated November 13, 1995 decided the same in favour of the assessee with a direction upon the Assessing Officer to examine as to whether the debit advice of the said customer was in respect of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppearing on behalf of the assessee, laboriously contended before us that the Tribunal below committed substantial error of law in holding that the theft alleged by the assessee was not a genuine one and even if so, there was Insurance coverage as it appears from the Assessing Officer s order and, therefore, the Tribunal was of the view that when the theft appeared to be not genuine, there was no question of allowing the claim of the assessee. According to Mr. Poddar, the aforesaid finding is based on no material and rather contrary to the materials on record, as the police report shows that the theft articles were not recovered and there is no indication in the police report that the allegation of theft was a concocted one. According to Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsidered the various correspondence between the assessee and the police authority and ultimately held that all these letters marked D-1 to D-6 do not prove conclusively that there was goods theft to the tune of Rs. 4,57,777/-. 10. In our opinion, by the mere finding that the assessee could not conclusively prove that there was theft of goods claimed, the Assessing Officer could not turn down the claim of the assessee. In order to disbelieve the claim, the Assessing Officer must arrive at a definite finding from the materials on record that the allegation of the assessee was false; otherwise, there was no justification of discarding the claim on the ground that the allegation was not conclusively proved. We fail to appreciate what he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two years, similar type of theft occurred, this time, the incident should be described as a concocted one. It appears that in last two Assessment years, the finding was that the allegation of theft was genuine and such finding has attained finality and the Revenue accepted such position. Thus, it is absurd to suggest, that there cannot be further theft in a subsequent year when in the last two years there were similar theft of materials. We are of the opinion that there was no justification for the Tribunal to disbelieve the allegation of theft from the materials on record. We have gone through the records and are of the opinion, that no contrary materials have been placed to justify the finding that the allegation of theft was a concocted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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