diff --git a/models/stock_location.py b/models/stock_location.py
index c4a14f5..17e6c04 100644
--- a/models/stock_location.py
+++ b/models/stock_location.py
@@ -126,6 +126,31 @@ class StockLocation(models.Model):
         
         return super()._name_search(name=name, domain=domain, operator=operator, limit=limit, order=order)
 
+class StockLot(models.Model):
+    _inherit = 'stock.lot'
+
+    @api.model
+    def _search(self, domain, offset=0, limit=None, order=None, *args, **kwargs):
+        ctx = self.env.context
+        
+        # We only want to filter if the user is in a picking using lot_id directly (like Receive operations)
+        active_picking_id = ctx.get('active_picking_id')
+        loc_id = ctx.get('default_location_id')
+        
+        if active_picking_id and loc_id:
+            picking = self.env['stock.picking'].sudo().browse(active_picking_id)
+            loc = self.env['stock.location'].sudo().browse(loc_id)
+            
+            # If the source is an internal or transit location, restrict the dropdown to lots actually present there.
+            # If the source is a supplier, we do not filter (they could be receiving brand new lots).
+            if picking.exists() and loc.exists() and loc.usage != 'supplier':
+                domain = Domain.AND([domain, [
+                    ('quant_ids.location_id', 'child_of', loc.id),
+                    ('quant_ids.quantity', '>', 0)
+                ]])
+                
+        return super()._search(domain, offset=offset, limit=limit, order=order, *args, **kwargs)
+
 _logger.info("="*80)
 _logger.info("STOCK_RESTRICT_SOURCE_LOCATION: stock_location.py module loaded successfully!")
 _logger.info("="*80)
diff --git a/views/stock_move_line_views.xml b/views/stock_move_line_views.xml
index 058d53b..c9938ed 100644
--- a/views/stock_move_line_views.xml
+++ b/views/stock_move_line_views.xml
@@ -38,6 +38,10 @@
                 <!-- Rely on backend StockQuant._search override for location filtering -->
                 <attribute name="context">{'default_location_id': location_id, 'default_product_id': product_id, 'search_view_ref': 'stock.quant_search_view', 'list_view_ref': 'stock.view_stock_quant_tree', 'form_view_ref': 'stock.view_stock_quant_form', 'readonly_form': True, 'show_src_package': 1, 'active_mo_id': context.get('active_mo_id'), 'default_picking_type_id': context.get('default_picking_type_id'), 'default_allowed_source_location_ids': allowed_source_location_ids}</attribute>
             </xpath>
+            <xpath expr="//field[@name='lot_id']" position="attributes">
+                <!-- Add default_location_id to context so python override can filter lots for transit receipts -->
+                <attribute name="context">{'default_product_id': product_id, 'active_picking_id': picking_id, 'default_location_id': location_id}</attribute>
+            </xpath>
             <xpath expr="//field[@name='location_id']" position="attributes">
                 <!-- Rely on backend StockLocation._name_search override -->
                 <attribute name="options">{'no_create': True}</attribute>
@@ -57,6 +61,9 @@
                 <!-- Rely on backend StockQuant._search override for location filtering -->
                 <attribute name="context">{'default_location_id': location_id, 'default_product_id': product_id, 'search_view_ref': 'stock.quant_search_view', 'list_view_ref': 'stock.view_stock_quant_tree', 'form_view_ref': 'stock.view_stock_quant_form', 'readonly_form': True, 'show_src_package': 1, 'active_mo_id': context.get('active_mo_id'), 'default_picking_type_id': context.get('default_picking_type_id'), 'default_allowed_source_location_ids': allowed_source_location_ids}</attribute>
             </xpath>
+            <xpath expr="//field[@name='lot_id']" position="attributes">
+                <attribute name="context">{'default_product_id': parent.product_id, 'active_picking_id': picking_id, 'default_location_id': location_id}</attribute>
+            </xpath>
             <xpath expr="//field[@name='location_id']" position="attributes">
                 <!-- Rely on backend StockLocation._name_search override -->
                 <attribute name="options">{'no_create': True}</attribute>