Case Law Details
Avijit Dewanjee Vs DCIT (ITAT Bangalore)
ITAT held that as the assessee has not ascertained the loss on account of embezzlement of cash in the books of account and it is shown as sundry debtors suspense account without charging it to the P&L account. At this stage, it is not possible to hold that it is ascertained liability to allow the loss as a deduction.
At the time of hearing, the Bench put a specific query to the ld. AR whether loss on account of embezzlement of cash at Rs.2,24,36,701 was actually debited to the P&L account or not while making deduction in the return of income. The ld. AR outrightly submitted that it was not originally charged to P&L a/c while filing return of income. However, the assessee while filing revised return, the assessee charged it to P&L a/c and balance sheet filed before the authorities.
However assessee has not filed any revised P&L a/c or balance sheet incorporating the loss in books of account of assessee. The assessee in the original return has not claimed the loss on account of embezzlement of cash. Later the assessee filed a revised return of income on 27.9.2012 as against original return filed on 13.9.2012 claiming loss of Rs.49,02,585 on reason for such variation which forced assessee to file revised return claiming this loss of Rs.2,24,36,701 towards embezzlement of cash. The assessee continued to show this loss in the balance sheet as “Sundry Debtors – Debit Balance – Suspense Account” without charging it to P&L a/c and debited in Debtors account from whom alleged person collected the cash. Being so, in our opinion, it is not ascertained liability in the assessment year under consideration. Accordingly, we reject the claim of assessee and the grounds raised in this regard are dismissed.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
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