21 May 2019
An assessee who is engaged in the trading of Marble Powder lost 2 bags due to the negligence of the transporter on account of rain. This is the 1st event of loss in his business. The assessee recovers the purchase amount of the 2 bags from the transportation expenses to be paid to the transporter. The assessee has recorded net amount paid to the transporter as transportation expenses in his books.
My queries: a. Whether the loss should be treated at as normal loss(for the time being, leave the amount recovered from transporter aside)? b. In case its normal loss, whether itc should be availed on these two bags? c. Whether any treatment is to be made of the amount recovered from transporter?
22 May 2019
a. As the amount is recovered from transporter it's not a loss. b.Reverse ITC as material lost in transit not a normal loss. C.Give credit note to buyer and adjust against recovery
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