CHHOTULAL AJITSINGH Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference by the Income-tax Appellate Tribunal, Delhi Bench " A ", stating a case and referring the following question for our opinion :

(2.) THE assesses carries on business as a commission agent for the purchase and sale of cotton and the question relates to-the assessment year 1961-62, the accounting year ending on 17th July, 1960. THE assessee used to keep cash in his business premises in connection with his business. In the night between 10th and 11th June, 1960, a theft was committed in the business premises and an iron safe was broken and Rs. 20,272 in cash comprising currency notes and change was stolen. THE assessee claimed this amount as admissible deduction while computing the total income of the previous year. THE claim was rejected by the Income-tax Officer, by the Appellate Assistant Commissioner and finally by the Appellate Tribunal. At the instance of the assessee, the Tribunal has made the present reference.

(3.) IN Commissioner of INcome-tax v. Sarya Sugar Mills P. Ltd., 1968 70 ITR 109 the assessee was a company carrying on the business of manufacturing and selling sugar. A theft was committed at 3 o'clock of the morning in the factory premises resulting in some loss. The assessee claimed the loss as permissible deduction. The High Court on a reference held that the loss on account of theft was a permissible deduction. Dealing with the argument of the revenue that the theft having been committed outside the business hours the loss could not be stated to be incidental to the business, the Bench observed :