TMI Blog2017 (10) TMI 1144X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 10(1) of the Indian Income-tax Act, if it arises during the course of carrying on of the business and is incidental to it. This is a case where theft has taken place in respect of the trading asset of the assessee and during the course of carrying on the business by it. Merely because the insurance company has not compensated the assessee and did not accept the claim of the assessee does not mean that the assessee has not incurred loss or theft has not taken place. We, therefore, confirm the order of the CIT(A) and dismiss the appeal of the Revenue - ITA No. 1904/Mum/2014 - - - Dated:- 11-9-2017 - Shri P K Bansal, Vice President And Shri Pawan Singh, Judicial Member For The Appellant : Shri Suman Kumar For The Respondent : None ORDER Per P K Bansal, Vice-President: This appeal has been filed by the Revenue against the order of the CIT(A)-25, Mumbai, dated 20.12.2013, for A.Y.2010 - 11. The Revenue has raised the following grounds of appeal: 1. The Ld. CIT(A) has erred in the law as well as on the facts in allowing loss claimed by the assessee as trading loss, as the assessee failed to produce documentary evidence like item wise inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olice about the incident. When they reached Pune on 29.12.2007 at 1.30 am, enquired from Shri Jinesh Ganna along with Shri Manish K Nanavati, Shri Ramesh Khandelwal and Shri Bipin Jain about the incident. They informed that on 29.10.2007 around 8.30 pm their Bus No. KA-03, B-9626 stopped near Pune Central Park Hotel for dinner. After dinner, when they returned they found that the bag was in proper place but again in Pune when they opened and checked the bag, they found the gold ornaments missing. One lady Smt. Kalpna, who was also travelling in the same bus, informed the police that out of the four person one came back with the cleaner and opened the bag and took something out and went for dinner and when they reached Pune they started speaking loudly saying that gold ornament of 4629.700 gms and 6752 gms has been stolen. Thus, it was understood that it was Shri Ramesh Khandelwal, who came back with the cleaner and opened the bag and took something out of the bag and kept the bag back in its proper place. In this regard note on loss by theft of ₹ 98 lacs was given by the assessee. The Police noted that the theft had occurred near about Pune. The Assessing Officer asked for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his total income, the A.O disallowed a sum of ₹ 93,69,402/- claimed by the appellant as loss on account of theft of gold jewellery while same was being taken to Hyderabad to be shown to the purchasers. The appellant sent three of its employees and a partner's son on 28/10/2007 by bus to Hyderabad to hand over item of jewellery weighing 11.382 kg for sale on approval. These four persons left Mumbai at about 5.15 pm in a Volvo bus. Between 8 and 8.30 PM when the bus halted at Central Park Hotel Pune for dinner the employees and the partner's son got down from the bus for dinner and the bag containing the item of jewellery was kept under the seat occupied by two of the employees (Jinesh and Bipin). After having dinner all the four returned back and got into the bus. They found that the bag containing jewellery was below the seats of two the employees, where it was kept before they left for dinner. After travelling for some time they noticed the bag was very light and therefore opened it and found that the gold ornaments were not there. Shri.Vikas telephoned on his mobile to the managing partner of the appellant- firm. The managing partner immediately left for Pune. A pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... handalwaland Bipin Sohanlal Jain) and Jinesh Ganna son of partner Navratnamal Ganna, were asked to carry jewellery weighing 11.382 kg of gold to Hyderabad. The four left by a Volvo bus to Hyderabad. The bag containing jewellery was kept under the seats occupied by two of the employees. Between 8 -8.30 PM the bus halted at a hotel to enabled passengers to have their dinner. The four persons also got down from the bus and after having dinner returned back to the bus and found that the bag containing jewellery was in the proper place where it was kept earlier. After the bus travelled a few miles, the bag was opened and to their surprise, the four found that the jewellery in the bag was missing. A police complaint was preferred and the police also filed a case before the Magistrate against the three employees and the cleaner of the bus. The Magistrate in his order dated 25/02/2011 released the three employees of the charges framed against as them and directed that the proceedings against the fourth accused (who was absent in the court) should be continued. This clearly shows that the appellant pursued the matter with the police but Magistrate released the three employees of the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the jewellery had been lost during the transit. The jewellery was sent not only with the employees but the son of the managing partner Shri Jinesh Ganna was also accompany them and the jewellery was kept in a bag below the seat where Shri Jinesh Ganna Bipin Jain were seated. The incident happened when all of them went for dinner when the bus stopped at Hotel Centre Park. It is case where the theft was noticed not only by the employees but also the managing partner s son and even one lady Smt. Kalpana travelling in the same bus, who confirmed to having seen one of the employees along with the cleaner returning to the seat and taking something from the bag. All the passengers in the bus went to the police station where FIR was lodged. All thee evidence prove that then has indeed taken place. It is not a case where we can say that the evidence has been created by the assessee. Had it been the case, FIR u/s. 408 of the IPC would not have been lodged. Hon ble Jurisdictional High Court in the case of G. G. Dandekar Machine Works Ltd. vs. CIT 202 ITR 161 has clearly held whether any loss from theft, dacoity, embezzlement, etc., is deductible or not, what is material is whether the loss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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