Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: empanelment :: ACCOUNTING STANDARD :: ACCOUNTING STANDARDS :: form 3cd :: TAX RATES - GOODS TAXABLE @ 4% :: VAT RATES :: VAT Audit :: list of goods taxed at 4% :: TDS :: Central Excise rule to resale the machines to a new company :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ARTICLES ON INPUT TAX CREDIT IN VAT :: cpt :: due date for vat payment :: articles on VAT and GST in India
« News Headlines »
 Here's how to calculate tax payable on your capital gains
 Income Tax calculations for the financial year 2016-17
 CPE Events 17 October - 22 October 2016
 High Court raps I-T Department for wrong tax demand
  CBDT signs 5 advance pricing pacts with Indian taxpayers
 Finance ministry warns tax officials of action against GST protest
 Big changes for small units under GST
 Parliament’s winter session to begin on November 16 to expedite GST rollout
 Income-tax (27th Amendment) Rules, 2016 - 92/2016
 Announcement - Clarifications in Respect of MEF 2016-17
 Non-taxing GST apps to make filing income tax return less painful

Seizure of drugs is trade loss for IT assessment: SC
December, 11th 2006

In an interesting verdict, the Supreme Court has held that for income tax assessment, loss in business has to be considered even if the activity involved illegal manufacturing and selling of contraband drugs forming part of trade stock.

The ruling was delivered while deciding the case of a doctor, who was arrested with a heroin worth Rs 5.5 lakh and had sought deduction of income on the ground that contraband seized from him forms part of his stock in trade and there was a loss on account of confiscation.

"Business losses are allowable on ordinary commercial principles in computing profits. Once it is found that the heroin seized formed part of the stock in trade of the assessee, it follows that the seizure and confiscation of such stock in trade has to be allowed as business loss," a Bench comprising Justice S B Sinha and Justice Markandey Katju said.

While concurring with the findings of Income Tax Appellate Tribunal (ITAT) allowing the deduction as business loss, the Bench in a recent ruling set aside the Madhya Pradesh High Court order denying income tax exemption to the doctor.

The ITAT had rejected the contention of the doctor that he was only earning income from his medical profession and was not doing any illegal activity of manufacturing and selling of heroin. However, it had held that since the heorin seized was his stock in trade it was implicit that the Tribunal reiterated the view that the he was doing the business of manufacturing and sale of heroin.

On appeal by the IT Department, the High Court had reversed the Tribunal's decision. Holding that the High Court's judgement which talked about the ethics of medical profession cannot be sustained, the apex court Bench said "we fully agree that the doctor was committing a highly immoral act in illegally manufacturing and selling heroin. However, cases are to be decided by court on legal principles and not on ones own moral views. Law is different from morality."

It observed that "the High Court has adopted an emotional and moral approach rather than a legal approach," it observed. The court relied on its 1980 judgment in the Piara Singh case in which the deduction was allowed on the loss arising out of confiscation of currency notes from an alleged smuggler.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Content Management System developers CMS developers Content Management Solutions CMS Solutions CMS India Content Management System India CMS development India Website CMS Website Content Management India Portal CMS India CMS Outsourcing CMS Vendor Complete CMS Custom CMS Services

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions