TMI Blog2006 (12) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... S. B. SINHA. and MARKANDEY KATJU. JUDGMENT The judgment of the court was delivered by MARKANDEY KATJU J .-Leave granted. This appeal has been filed against the impugned judgment dated November 29, 2004, passed by the Madhya Pradesh High Court in I. T. A. No. 33 of 1999 (CIT v. Dr. T. A. Qureshi [2005] 275 ITR 352 (MP)) Heard learned counsel for the parties and perused the record. The appellant is an assessee. He is a doctor by profession at a place called "Garoth" in District Mandsaur. On July 18, 1985, CBI sleuths arrested the appellant while transporting a huge quantity of a contraband article (the narcotic drug heroin) in a jeep Gonga) RSO 3592. This led to further raid in his residential premises. In this raid, one clande ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 26, 1994, accepted that the assessee had in fact claimed it as a loss, and consequently it recalled its order dated March 31, 1993. Ultimately, the Tribunal by order dated October 14, 1998, allowed the appeal and held that the assessee is entitled to claim the deduction as a business loss,. In other words, the Tribunal was of the view that since the seizure has resulted in loss in trade hence, relying upon the law laid down by this court in CIT v. Piara Singh [1980] 124 ITR 40, the Tribunal allowed the deduction of Rs. 2lakhs out of the gross total income of the assessee. It is against this view of the Tribunal that the Revenue felt aggrieved and filed the appeal before the High Court which, as stated above, was admitted for final hearing o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies that the apparatus for manufacturing heroin from opium did not belong to the assessee but belonged to one V. T. Madan. However, the Assessing Officer did not agree with this contention and the Tribunal in its earlier order dated March 31, 1993, has recorded a finding (in paragraph 7 of its order) that the assessee was involved in the manufacture and selling of heroin for material gain. Thus, it has been held by the income-tax authorities that the appellant was engaged in manufacture of heroin and selling it for material gain. No doubt, the assessee had contended that he was only earning income from his medical profession and was not doing any illegal activity of manufacturing and selling of heroin. However, the finding of fact of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver, in paragraph 10 of its judgment observed: "The assessee in this case was engaged in the profession of doctor. He had nothing to do with the contraband article-heroin for carrying on his profession. It is an admitted fact that the possession of heroin is an offence under the Narcotic Drugs and Psychotropic Substances Act. In this view, the rigour of the Explanation to section 37 was fully satisfied and hence the question of claiming any deduction for the value of the seized article did not arise nor was the assessee entitled to claim any such deduction who was found indulging in such heinous and illegal business unconnected with his pious professional activity. Indeed, it was a disgrace for the doctor community where one doctor vya ..... X X X X Extracts X X X X X X X X Extracts X X X X
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