1997 (4) TMI 102

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....shares and securities. 3. On 3rd Feb., 1988, the assessee's salesman was returning to Rajkot after a business tour of Ahmedabad and Baroda. During the brief halt at Limbdi Bus Station, out of total gold ornaments of 1027 gms, gold ornaments weighing 569 grams were stolen from his personal belongings kept in the Bus. A police complaint was lodged immediately at the Limbdi Police Station on 3rd Feb., 1988. The assessee continued to show the above stolen goods as part of his stock-in-trade not only during the said year i.e., asst. yr. 1988-89 but also in subsequent years at the market value. However, during the previous year relating to the assessment year under appeal, the assessee wrote off the value of the ornaments as irrecoverable in h....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....d the same during the year under appeal. 4. On appeal, the CIT(A) confirmed the action of the AO with the following brief remarks: "I have considered the rival submissions. As rightly pointed out by the AO, the matter had become final in the sense that the police had given the clear findings regarding non-recovery of the stolen ornaments on 19th June, 1988 i.e. in the year relevant to asst. yr. 1989-90 and, therefore, the appellant need not have waited for writing off the amount till the year under appeal. The AO's decision is therefore upheld." 5. Shri N.B. Shah, the learned counsel for the assessee submitted that the decisions of the learned AO and the CIT(A) are wholly unjustified both on facts as well as in law. He submitted th....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....in dispute that the assessee suffered loss due to theft, during the course of his business and as such it is an allowable loss. Therefore, the crux of the controversy is the year of allowability of the impugned loss. In our opinion, a decision as to the year in which loss due to theft is deductible would rest on the facts and circumstances of each case but the basic principle to be considered in this connection is that loss must be actual and present. Loss ordinarily occurs when the moneys are lost to the assessee and there is no real chance of recovering then. The whole issue is to be viewed in the commercial sense and in the circumstances of the case the assessee was the best judge to take a decision as to the finality of the loss due to ....