TMI Blog1980 (5) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... Steel Co. Limited, and gets a commission of Rs. 27 per metric ton of goods handled on their behalf except for the first 100 metric tons for which no payment is received by him as per cl. 15 of the agreement. Under this agreement with the principals it is provided that the material in question shall be despatched by their works at Jamshedpur to Mandi Gobindgarh where it will be stored in a manner prescribed by their Jullundur office. The material when received will be unloaded and taken to the yard of the appellant and for this purpose the necessary rupees will be delivered to the various customers on production of the original delivery order by them as given to them by the Jullundur office accompanied by a proper letter of authority and af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce wherever necessary in order that the agreement is fully implemented. Our representatives shall be given all facilities to inspect stock, stacking arrangements or to conduct surprise stock verification etc., at any time." And under the cl. 18 it is laid down that "any shortage found during the ground stock verification by our internal audit Department in relation to actual weights recorded in FTRs shall be debited to you and be recoverable from you by us set off against remuneration to you hereunder." (4) In this connection it is stated by the A.R. that the pursuance of the aforesaid agreement and agreement between the appellant and the principal certain stock verification were done by their representative in 1972-73 and 1973-74 reveal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avoiding to report for duty. A list of all the employees who were posted in the stockyard was given to the police authorities and they were requested to take the follow up action for unearthing the fraud committed by the culprits by betraying the trust reposed in them. A copy of this report was also forwarded to Sh. Harjit Singh, DIG, Police, Patiala and also to the principals as well as their Jullundur and New Delhi offices. Thereafter it appears the police were able to get hold of the aforesaid weighment clerk from U.P. but after all the result of long and thorough investigation no clue could be found for the responsibility of the actual losses and no specific charges could be framed against any member of the staff which could stand in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... debited his account with the amount of shortage expected in the stock, he wrote off that mount of Rs. 1,53,351 as a loss and made a claim before the ITO. The ITO swayed by the consideration arising from the withdrawal of the complaint did not believe that the loss was genuine. And therefore, caused an addition to be made. Matter went to CIT(A). He did not find himself in agreement with the ITO and allowed the claim of loss made by the assessee. It is against this finding of the CIT, the Revenue is in appeal before us. 2. The D.R. relied on the order of the ITO and made a submission that the CIT acquired to the claim of the assessee. If the claim or loss had been genuine the assessee would not withdraw the complaint. Withdrawal of complai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion made on behalf of the assessee. We endorse his view that the assessee had acted like a prudent businessman in writing to police authorities to treat the complaint withdrawn. He got rid of the employees without making himself liable for payment of compensation and other benefits and he also got the principal to resume the supplies which they had discontinued 4 months before. Therefore, no adverse inference can be drawn against the claim of the assessee for having the loss allowed. It could not lead to the inference that there was any collusion, as Revenue had alleged between him and the employee, to profit from the shortage of the stock. The Revenue has not brought any material to show that there was any collusion between them and that i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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