TMI Blog2010 (12) TMI 1188X X X X Extracts X X X X X X X X Extracts X X X X ..... The only issue arises for consideration in this appeal is with regard to disallowance of ₹ 97,48,441 claimed as loss of stock-in-trade in transit. Shri S. Rama Rao, the learned counsel for the assessee submitted that the assessee is the proprietor of M/s. Lilly Pharmaceuticals. In the course of business activities, the assessee exported bulk drugs worth ₹ 97,58,441 to Mexico through San Diego Port, California, USA. However, in the course of the transit before the goods reached Mexico, the Customs and Border Protection Force of USA seized the stock in transit and ultimately it was forfeited. Therefore, the assessee lost the stock-in-trade during the course of its transit even before it reached the customer at Mexico. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of law when the goods are transported to another state. Therefore, the value of goods written off was not deductible. 4. We have considered the rival submissions on either side and also perused the material available on record. Admittedly the assessee exported pharmaceuticals to Mexico and the same was confiscated by the Customs and Border Protection Force of USA. The assessee admittedly lost the stock-in-trade during the course of transit. The goods exported has not reached the customer at Mexico. The question arises for consideration is when the assessee lost the stockin- trade during the course of transit for violation of statutory provisions of USA whether the value of the stock-in-trade can be allowed as deduction while computin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowed by another Bench of the Apex Court in Dr. T.A. Quereshi vs. CIT (2006) 287 ITR 547. 5. In the case before the Apex Court in Dr. T.A. Quereshi (supra) the assessee was a medical practitioner and he was arrested by the CBI while transporting huge quantity of heroin, a narcotic drug. On further raid at the residential premises of the assessee the CBI found several narcotic drugs and all contraband articles were seized under Narcotic Drugs Psychotropic Substances Act, 1985. The assessee claimed the value of the narcotic drugs as deduction in the Income-tax proceedings. The Revenue authorities rejected the claim of the assessee which was also confirmed by the High Court. However, on further appeal before the Supreme Court it was held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 130 acres of agricultural land. the assessee cultivated 86.77 acres of land with mango trees and the balance 44.72 acres of land was cultivated with paddy. The assessee estimated the agricultural income at ₹ 15,000 per acre on the mango garden and ₹ 10,000 per acre from paddy. The Assessing Officer rejected the claim of the assessee only on the ground that the assessee has not maintained the books of account. The fact that the assessee cultivated 86.77 acres of land with mango trees and 44.72 aces of land with paddy is not in dispute. Therefore, according to the learned counsel for the assessee the Assessing Officer has no reason to disbelieve the claim of the assessee. 7. On the contrary, Shri Amlan Tripathy, the learned DR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without any basis the Assessing Officer cannot simply disallow the claim of the assessee, especially when the land holding and the nature of cultivation is not in dispute. In our opinion, normally one acre of land cultivated with mango trees would fetch ₹ 15,000 per acre in a year. Similarly it is also common to fetch ₹ 10,000 per acre with regard to paddy cultivation. In the absence of any other material contrary to the estimation made by the assessee, we do not find any reason to restrict the claim of the assessee. By taking into consideration, the facts and circumstances of the case, we do not find any reason to restrict the agricultural income at ₹ 7.5 lakhs. Therefore, we set aside the orders of the lower authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X
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