TMI Blog2001 (12) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... loss of Rs.7,80,000?" For the assessment years 1979-80 and 1980-81 in R.A. Nos. 224 and 225/ Ahd of 1987: "2. Whether, on the facts and in the Circumstances of the case, the Tribunal was right in law in disallowing the commission paid to the directors as perquisite in the assessment years 1979-80 and 1980-81, for the purposes of section 40(c) of the Act?" At the instance of the Revenue (assessment years 1977-78, 1979-80 and 1980-81 in R.A. Nos. 241, 242 and 243/Ahd of 1987): "1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law to hold that a sum of Rs.20,000 out of motor car expenses in each of the assessment years 1977-78, 1979-80 and 1980-81 was not disallowable as personal and non-busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13,40,000 ----------- --------------------------------------------------------------------------- The said loss was discovered during the year under consideration. However, the Income-tax Officer was of the view that the extent of loss remained indeterminate and unknown during the year under consideration, and the amount of actual loss could be known only when the assessee entered into compromise decree with the defaulter employee in the calendar year 1980 relevant to the assessment year 1981-82. Accordingly, the assessee's claim for loss was disallowed. The Commissioner of Income-tax (Appeals) in the appeal filed by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... balance of Rs.7,79,000 was a total loss which ought to be allowed as a deduction. The Revenue, on the other hand, supported the order of the Commissioner (Appeals). The Tribunal reproduced the last paragraph of the circular and held that the said circular provides for two aspects: firstly, that such embezzlement loss incurred by the assessee because of the employee had to be treated to be incidental to the business and the second part was that the deduction had to be allowed in the year in which the loss was discovered. The Tribunal accepted the position that there was no dispute as to loss being incidental to the business. In so far as the year in which the loss was allowable, the Tribunal took it upon itself that even if it was establish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in light of the fact that the assessee was claiming the entire loss during the year under consideration. He further stated that out of abundant caution even if in the appeal or further proceedings pertaining to the assessment year 1981-82 any deduction from the balance of loss was allowed, the petitioner-assessee would not raise any objection and surrender the same for the purpose of taxability. In view of the fact that Mr. Shah has made a statement to the effect that no deduction has been allowed in any subsequent year we hold that the assessee would be entitled to deduction of loss during the year under consideration as this is the year in which the loss on account of embezzlement was in fact discovered. There is no dispute as to the f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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