Law:

Section:

Section 28(i) of the Income-tax Act, 1961-Business loss/Deduction-Assessee's shop destroyed by fire during communal disturbances-Assesses claimed deduction of consequent loss of Rs. 20,795-No account books to show exact extent of loss produced on pretext that they were also destroyed by fire but no document produced to corroborate latter plea-Whether impugned loss was deductible-Held, on facts, no Facts In the previous year, relevant to the assessment year 1968-69, the shop of the assessee, a biri manufacturer, was set on fire in the wake of communal disturbances. It claimed deduction of the consequent loss of Rs. 20,795. The ITO, the AAC and the Tribunal rejected the assessee's claim on the ground (i ) that the assessee had failed to produce account books to show as to what goods the shop contained on the date of the said fire; and (ii) that eventually it failed to prove the loss. On reference, the assessee contended that as the account books were also destroyed by fire, it was humanly impossible for it to produce the same. It substantiated its claim by producing the letter sent by it to the police by way of first information report. Held The assessee could not claim exemption of any amount unless he had proved that goods and cash to that extent were burnt in the fire. In the instant case, there was no document to show that the account books were in the shop when it was set on fire and that they too had been destroyed. Even the first information report did not mention that the account books had also been destroyed as a result of the fire. Therefore, the impugned loss was not deductible. Section 145 of the Income-tax Act, 1961-Method of accounting-year in which liability/expenditure deuctible-Assessee was following mercantile system of accounting-On account of dubious position regarding its sales tax liability for a certain period, it did not claim deduction of such liability in assessment year in which it accrued-Later, on matter being settled, it paid impugned liability and claimed deduction of the same in assessment year in which it was paid-Whether assessee's claim acceptable-Held, on facts, no Facts By a State Government's notification, no tax was payable…

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