https://www.taxtmi.com/caselaws?id=179678 Loss from employee embezzlement is not a bad debt unless a debt in law first existed and later became irrecoverable, and it is not business expenditure because it is an involuntary loss rather than a voluntary outgoing. It is nevertheless deductible as a trading loss where the defalcation is incidental to the business, arises from duties necessarily entrusted to staff, and is written off as irrecoverable. On the facts, the cashier handled the company's money in the ordinary course of business, the loss occurred during those duties, and no contrary evidence showed recovery was possible, so the amount was allowable in the relevant assessment year. en-us Thu, 17 Feb 1955 00:00:00 +0530 Tue, 08 Mar 2016 10:09:41 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=179678 Loss from employee embezzlement is not a bad debt unless a debt in law first existed and later became irrecoverable, and it is not business expenditure because it is an involuntary loss rather than a voluntary outgoing. It is nevertheless deductible as a trading loss where the defalcation is incidental to the business, arises from duties necessarily entrusted to staff, and is written off as irrecoverable. On the facts, the cashier handled the company's money in the ordinary course of business, the loss occurred during those duties, and no contrary evidence showed recovery was possible, so the amount was allowable in the relevant assessment year. Case-Laws Income Tax Thu, 17 Feb 1955 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=179678