Chandra Reddy, C.J. - (1.) The question referred for the opinion of this Court under section 66 (1) of the Indian Income-tax Act, is, " whether on the facts and in the circumstances of the case the loss of Rs. 4,004, caused by theft is an allowable deduction ?"
(2.) The reference relates to the assessment year 1957-58, the accounting year being 1956-57. The assessee derived income from several sources, one of them being the agency of Tata Mercedes Benz. It would appear that a stranger came to the assessee's shop during business hours, sat down near the cash-box and was talking to him. Just then, he had to go into another room to talk on the telephone. Taking advantage of this situation, the stranger is said to have removed the cash from the cash-box and disappeared with it. The assessee claimed this loss under section 10 (1) of the Indian Income-tax Act as an allowable deduction as incidental to the carrying on of the business. This was disallowed by the revenue.
(3.) The appeals carried by the assessee to the Appellate Assistant Commissioner and the Tribunal proved unfruitful. However, at the request of the asseessee, the Income-tax Appellate Tribunal referred the question formulated above for the opinion of this Court. The fact that theft occurred is not in dispute. But, the only point for consideration is whether the loss is a permissible deduction under section 10 (1). This, in its turn, depends upon whether the loss could be described as one incidental to or directly connected with the carrying on of the business. Thus, the question resolves itself into this, namely, whether the loss of this money could be said to spring directly from the business.;