Impact of theft

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

23 September 2016 Dear Expert,

We went for a business meeting to a bank and while our car was parked outside, a few items like laptops, wallets, and cash approx Rs. 2.5Lacs was stolen from our car.
Can we claim it as a business expense during income tax computation and under which head?

We had filed an FIR that very day, we did not claim any insurance.

CA Sumiit B Nagpal

CA Sumiit B Nagpal (Expert)
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23 September 2016 You can claim the same under business expenses under section 37 of the Income tax Act, 1961 but be advised that it can be a matter of dispute/litigation between the revenue authorities and you if your case is selected for scrutiny. Further having said that please be advised that Section 37 allows all revenue expenditure incurred during the year wholly and solely for the purpose of business and the expenses is not falling under the sections 30 to 36. Your loss from theft doesn't fall under section 30 to 36 and you can claim so under section 37 if the laptop, car and wallet/cash belongs to business. Even if the same is disallowed in scrutiny, you can file an appeal against such addition and this matter can be well dealt with in appeal.
Other views are solicited.