Loss of money by hacking - whether deductible?

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kunal (Querist)
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14 February 2014 I have come across a case where certain miscreants through the use of hacking tools, hacked into a bank account of a company and embezzled a large sum of money. Even though the perpetrators of the crime have been arrested, the police has not yet been able to nab the miscreants.
Whether in this particular case, writing off the amount will be allowable as a deduction under the Income Tax Act, 1961? Whether any formalities have to complied with?

Kindly mail me the answers on kunal.suraiya@rajda.in

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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14 February 2014 The loss is not directly connected to the business operation of the company and not incidental to carrying on of the business of the company. Hence can't be allowed as business expenditure u/s 37(1) of the Income tax Act,1961.

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