M/S. SINGH CYCLE & MOTOR CO.,PUNE vs. DEPUTY COMMISSIONER OF INCOME-TAX,

Shri Bharat Shah appearing on behalf of the assessee submitted that the assessee is a partnership firm and is a dealer of Hero Honda Motor Cycle. During the period relevant to the assessment year under appeal the assessee has carried physical stock verification wherein it was found that 70 vehicles were stolen from the godown. This fact came to the knowledge of assessee on 31-03-2009. The loss of Rs.24.14 lakhs was debited to the P & L Account. The Assessing Officer disallowed assessee’s claim of difference in stock due to loss/theft.

Per contra, Shri Sanjeev Ghei representing the Department vehemently defended the impugned order. The ld. DR submitted that the assessee is habitual in claiming such loss on account of theft of stock. The assessee has not lodged any FIR on account of theft of motorcycles and no claim has been made by the assessee from insurance for such loss. Therefore, the assessee’s claim of loss of stock is not bonafide.

We have heard the submissions made by representatives of rival sides and have perused the orders of authorities below. The solitary ground raised by the assessee in appeal is against disallowance of Rs.24.14 lakhs on account of loss of stock of motorcycles. The case of assessee is that the assessee came to know about the loss of stock of vehicles (motorcycles) on physical verification of stock as on 31-03-2009. It is an undisputed fact that the assessee has not lodged any FIR against the theft of such large number of motorcycles and no claim has been made for the loss of unregistered new vehicles from the Insurance Company. Theft of unregistered vehicles is a grave issue which ought to have been brought to notice of Police. In the absence of these vital documentary evidences, the explanation put forward by the assessee explaining difference in stock is not sustainable. The assessee has failed to substantiate the theft of 70 motorcycles during the period relevant to the assessment year under appeal. In the absence of any cogent evidence, we do not find any infirmity in the order of Commissioner of Income Tax (Appeals). Accordingly, the same is upheld and the appeal of assessee is dismissed being devoid of any merit.

In the result, the appeal of assessee is dismissed.