Case Law Details
Nishant Krishna Vs JCIT (ITAT Patna)
Introduction: The Income Tax Appellate Tribunal (ITAT), Patna, in the case of Nishant Krishna Vs JCIT, highlighted a pivotal issue pertaining to insurance claims due to fire loss. The ITAT held that these claims cannot be disallowed, favoring Nishant Krishna, the assessee.
Analysis: The case centered on the disallowance of Rs.4,86,699/- on account of loss by fire, claimed by the assessee from the insurance company. The ITAT noted that there was no dispute regarding the fire incident at the assessee’s business premises, and the subsequent claim made to the insurance company. The critical point of contention was whether the difference between the claim made by the assessee and the amount paid by the insurance company was allowable or not. The ITAT concluded that the claim entertained by the insurance company was pursuant to the terms and conditions of the insurance policy, which did not necessarily cover the entire actual loss suffered by the assessee. Hence, the tribunal allowed the claim of the assessee.
Conclusion: The judgment of the ITAT in this case has noteworthy implications for businesses and the insurance industry alike. The ruling emphasizes that the payment made by the insurance company should not be considered sacrosanct to determine the actual loss incurred by the assessee. The case brings to the fore the potential discrepancies between the actual losses suffered by a business and the amount recovered from an insurance claim.
FULL TEXT OF THE ORDER OF ITAT PATNA
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