Case Law Details
Nikon Systems Pvt. Ltd Vs ACIT (ITAT Delhi)
Admittedly, fire occurred during the year, the traded goods of the assessee are lost during the year due to fire. Such traded goods were the stock in trade of the assessee. Undoubtedly, the traded goods were insured with the insurance Co for any loss due to fire. But merely because the assessee has an insurance, it does not mean that assessee has not incurred the loss during the year. Moment the insurance Co determines the loss in terms of the insurance policy obtained by the assessee from the insurance company, naturally the assessee would be reimbursed or compensated for the same. However, it does not mean that assessee has not incurred the losses. The accident of fire at the premises of the assessee in which it has lost goods due to the fire is one incident. The action of the assessee of obtaining the insurance is altogether a different act to mitigate the loss incurred by the assessee. The claim of the insurance of the assessee from insurance Co would also be subject to many conditions. However merely because the goods of the assessee are insured against the accident of fire, it cannot be said that assessee has not lost goods due to fire. Naturally, the loss of the assessee would be compensated in subsequent year later on, at that particular time such insurance claim received would be chargeable to tax under section 41 (1) of the act as it is against the traded goods. Even otherwise, the trading loss incurred by the assessee is allowable to the assessee in the year in which it is incurred. The case of the assessee is also supported by the decision of the honourable patna High Court in 15 ITR 155, wherein it has been held that loss of/in trade or to fire is allowable as a trading loss irrespective of fact whether any sum is received from insurance Co or not. In view of the above facts, we do not find any reason to uphold the orders of the lower authorities. They are reversed. Accordingly, the learned assessing officer is directed to grant the deduction of the loss due to fire of ₹ 5 2406053 to the assessee. In the result appeal of the assessee with respect to ground number one and two is allowed.
FULL TEXT OF THE ITAT JUDGEMENT
1. This appeal is filed by the assessee against the order of the ld CIT(A)-37, New Delhi dated 28.06.2019 for the Assessment Year 2015-16.
2. The assessee has raised the following grounds of appeal:-
Please become a Premium member. If you are already a Premium member, login here to access the full content.
