BANSIDHAR ONKARMAL Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) The question that has been referred by the Income-tax Appellate Tribunal, Calcutta Branch, Patna to us for opinion as follows :- "Whether in the circumstances of the case the sum of Rs. 8,675 is allowable either as a trading loss or as an expenditure laid out or expended wholly and exclusively for the purposes of the business within the meaning of Section 10(2)(xii) of the Act ?" [Presumably Section 10(2)(xii) of the Act ?

(2.) The facts found by the Tribunal are these :- The assessee carries on the business of selling yarn, speculating on cotton and money-lending. He claimed deduction of Rs. 8,675 in respect of the accounting year commencing from October 21, 1941, and ending on December 8, 1942, on the ground that the said sum was stolen from the iron safe inside his shop by one Jauhar Mal who was a relation of the assessee and who was also working as the accountant of his firm during the year in question. The shop of the assessee used to be closed at about 8 p.m., and the iron safe containing the cash used to remain inside the shop. It was found by all the Income-tax authorities that the said Jauhar Mal secured the keys of the shops after 8 p.m., entered the shop at about 10 p.m., opened the iron safe and removed Rs. 8,995.

(3.) On these facts the question arises as to whether the assessee can claim a deduction of the sum stolen, either under the general provisions of sub-section (1) of Section 10 or under clause (xv) of sub-section (2) of that Section. There is no express provision in the Indian Income-tax Act authorizing such deduction but Mr. Mohanti has relied on some decision in which such losses have been allowed on general principles of computation of profits.