NARESH RAMAN GUJAR,PUNE vs. INCOME-TAX OFFICER, WARD - 2(2), PUNE

आदेश / ORDER PER ANIL CHATURVEDI, AM :

Assessee is an individual and Proprietor of Lee Computers. Assessee electronically filed his return of income for A.Y. 2010-11 on 15.10.2010 declaring total income of Rs.4,79,520/-. The case was selected for scrutiny and thereafter, assessment was framed u/s

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143(3) of the Act vide order dt.14.02.2013 and the total income was

determined at Rs.7,04,350/-. Aggrieved by the order of AO, assessee

carried the matter before Ld.CIT(A), who vide order dt.06.09.2017 (in

appeal No.PN/CIT(A)-5/ITO, Wd.2(2), Pune/764/2012-13) dismissed

the appeal of assessee. Aggrieved by the order of Ld.CIT(A), assessee

is now in appeal and has raised the following effective ground :

“The learned CIT(A) erred in law and on facts in confirming addition of Rs.1,97,822/- on account of excess claim of loss of stock on account of burglary.”

Profit and Loss account, AO noticed that assessee had claimed

deduction of Rs.5,54,771/- on account of goods lost in burglary which

had taken place in assesses’s shop. He noticed that assessee had

claimed compensation of Rs.14,11,245/- from National Insurance

Company Ltd., who had assessed the loss at Rs.12,38,653/- and had

settled the claim at Rs.8,81,704/- as against which, assessee had

claimed deduction of Rs.5,54,771/-. AO considered the difference of

Rs.1,97,822/- and being excess claim and disallowed the same.

Aggrieved by the order of AO, assessee carried the matter before

Ld.CIT(A), who upheld the order of AO. Aggrieved by the order of

Ld.CIT(A), assessee is now in appeal.

and Ld.CIT(A) and pointed to the copy of the FIR which is placed at

pages 5 to 10 and Panchanama placed at Page 11 of the Paper Book.

She also pointed to the statement of assessee recorded by the Police

Authorities, the copy of which is placed at pages 32 to 34 of the Paper

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Book. She submitted that it is not a case of Revenue that the claim

made by the assessee is bogus. Only because the Insurance Company

has settled the claim at a lesser figure, the amount of deduction

cannot be denied to assessee. She therefore submitted that assessee’s

claim of loss be allowed. Ld.D.R. on the other hand, supported the

order of AO and Ld.CIT(A).

record. The issue in the present case is with respect to the

disallowance of Rs.1,97,822/- being the excess claim. In the present

case before us, Ld.A.R. submitted that the loss occurred due to

burglary which had taken place in assessee’s shop. The complaint for

loss due to burglary was lodged with the police authorities. The

aforesaid facts have not been controverted by Revenue. The reason

for disallowance by AO is that assessee had made the excess claim. In

the present case, I find that no material has been placed by the AO to

demonstrate that the claim of loss made by the assessee was

excessive or bogus. Further, it is neither the case of Revenue that the

complaint lodged with the police for burglary in the shop of assessee

was false nor that the police stated in the report that the FIR lodged

by the assessee was false. Further it is not the case of Revenue that

the claim lodged by the assessee with the Insurance Company has

been reduced on account of the claim be false. The contention of the

assessee that the Insurance Company calculated the insurance claim

on the basis of average clause wherein the cost of goods lost as per

the books is taken “at cost” and the calculation considered by

Insurance Company is only for computation for payment of claim, is

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not found to be false. Further the conclusion of the AO that assessee

had made excess claim of loss is also not supported by any material evidence. The lodging of FIR with the police prima facie shows that

burglary had taken place. It is also not the case of Revenue that the

claim made by the assessee is bogus. Considering the totality of the

aforesaid facts, I am of the view that in the present case the loss by

burglary has arisen during the course of business and was hence allowable u/s 37(1) of the Act. I therefore direct the AO to allow the

assessee’s claim of loss. Thus, the grounds of the assessee are

allowed.

Order pronounced on the 7th day of March, 2019.

S Sd/- (ANIL CHATURVEDI) लेखा सद�य / ACCOUNTANT MEMBER

पुणे Pune; �दनांक Dated : 7th March, 2019. Yamini

आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to :

आदेशानुसार/ BY ORDER

// True Copy // // व�र�ठ �नजी स�चव / Sr. Private Secretary आयकर अपील�य अ�धकरण ,पुणे / ITAT, Pune.