Fraud due to embezzlement of money by employee

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CA Vinay Dixit (Querist)
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25 November 2017 hi all,

suppose in private limited company some employees do embezzlement of money , then how can company can claim loss due to embezzlement of money as per income tax act? tell me procedure need to follow for claiming Loss due to embezzlement of money by employees. give me details for document required to claim loss due to embezzlement of money

Please reply soon

thanks

Sumeet

Sumeet (Expert)
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25 November 2017 Claim Abnormal Loss in P&L A/c while calculating Business Profit Taxable under PGBP Head. FIR copy of theft and documents related to employment of employees involved in embezzlement should be kept in case it is required subsequentaly.

CA Vinay Dixit

CA Vinay Dixit (Querist)
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25 November 2017 suppose if amount of embezzled money later recovered in subsequent assessment year, than can company can claim recovered amount as income in that year? suppose no FIR filled but there is confession of Employees who embezzled money than can company claim as evidence?

Sumeet

Sumeet (Expert)
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25 November 2017 It would be practically difficult to convince Assessing Officer, the genuineness of transaction to his satisfaction. Since it looks like you are only shifting business profit to subsequent Assessment Years.

CA Vinay Dixit

CA Vinay Dixit (Querist)
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25 November 2017 Thanks for your reply. actually this incidence happened in our company & we got confession from employee but still not filed FIR. we are afraid that we might not get recovery of embezzled money in current F.Y. but we can get money in subsequent F.Y.'s

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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30 September 2021 Based on FIR details, and Insurance claim, justification to the balance loss can be provided.

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