set off of loss
This query is : Open
08 March 2008
my client senr rs 5 laksh with his employee during f y 06.07 for purchase og goods .and the employee went abconding. this was shown in the books as receivavable from him.
now the police have arrested him and said that the amount is irrecoverable. the business was closed during the f y 07-08
how can he set off this loss
how to adjust this entry
now the police have arrested him and said that the amount is irrecoverable. the business was closed during the f y 07-08
how can he set off this loss
how to adjust this entry
S.Srinivasaraghavan
(Expert)
08 March 2008
This will be a business loss no doubt.
CA. GOPAL SONIKA
(Expert)
08 March 2008
The loss cannot be set off. however. this can be claimed as loss in P/L account as per circular 25 of I tax act
Late CA Sampat Jain
(Expert)
09 March 2008
Embezzlement loss is not deductible under section 37(1) - A claim for deduction of loss due to embezzlement cannot be admitted under section 37(1) because money which is withdrawn by an employee out of the business without authority and by fraud on the proprietor can in no sense be said to be ‘an expenditure laid out or expended wholly and exclusively’ for the purpose of the business - Badridas Daga v. CIT [1958] 34 ITR 10 (SC)/Associated Banking Corpn. of India Ltd. v. CIT [1965] 56 ITR 1 (SC)/Lord’s Dairy Farm Ltd. v. CIT [1955] 27 ITR 700 (Bom.
HOWEVER WITH DUE RESPECT TO THE JUDICIARY , I AM OF THE VIEW THAT IT IS AN ALLOWABLE BUSINESS LOSS
HOWEVER WITH DUE RESPECT TO THE JUDICIARY , I AM OF THE VIEW THAT IT IS AN ALLOWABLE BUSINESS LOSS
10 March 2008
LOSS IS BUSINESS LOSS AND SHOULD BE DEBITED TO PROFIT AND LOSS ACCOUNT .IT WILL BE ALLOWED
CA J M Pattanayak
(Expert)
11 March 2008
Its a business loss and deductible.
12 March 2008
but the business was closed during the FY 2007-2008 WHERE AS THIS EMBLEZEMENT TOOK PLACE IN 2206-2007 FY
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