COMMISSIONER OF INCOME TAX, PATIALA vs PIARA SINGH

The Supreme Court held that under Section 10(1) of the Income Tax Act, 1922, a smuggler is entitled to a deduction for losses incurred in the course of business, including the confiscation of currency notes used in smuggling. The Court reasoned that the confiscation is a predictable incident of the smuggling business, akin to a loss from theft. The appeal was allowed, affirming the Tribunal's decision to grant the deduction for the confiscated amount of Rs. 65,500/- as it directly resulted from the business activity.