Judgment

SHAH, J. : The Nainital Bank Ltd. has its head office at Nainital and a branch at Ramnagar. Currency notes of the value of 1,06,000 and a large quantity of jewellery pledged with the Bank by its constituents were stolen by dacoits on June 11, 1951 from the premises of the bank. The Bank claimed in its return for the assessment year 1952-53 the loss of currency notes as a permissible deduction. The departmental authorities disallowed the claim. But the claim was allowed by the High Court of Allahabad and that order was firms by this Court : see Commr. of Income-tax v. Nainital Bank Ltd., (1965) 55 ITR 707:

2. In regard to the loss of jewellery the Bank settled the claims of the constituents who had pledged their jewellery. The terms of settlement were these: when the market value of the jewellery pledged exceeded the amount advanced, the difference was paid by the Bank to the constituent; when the market value of the jewellery was less than the amount advanced, the difference was recovered from the constituent. Under the adjustments made in this manner, in the year 1952 the Bank made a total payment of Rs. 48,891 and in the year 1953 the Bank paid Rs. 1,21,760. In its return