IMPORTANT INCOME TAX CASE LAWS 04.01.2026 Relevant Act Section Case Law Title Brief Summary Citation Income-tax Act, 1961 Section 5 Robust Transportation (P.) Ltd. v. ITO No notional interest can be taxed on interest-free loans advanced for proposed acquisitions where the business had not commenced and there was no contractual stipulation to charge interest. Click… Read More »
Freight Forwarder’s Form 26AS Mismatch Addition Deleted as Gross Receipts Not Entirely Income Issue Whether an addition made solely on the basis of a discrepancy between gross receipts in Form 26AS and the income declared in the return is sustainable, particularly when the assessee acts as an agent remitting the bulk of receipts to principals.… Read More »
Final Assessment Order Passed Beyond Section 153 Time Limit in DRP Case Quashed Issue Whether the mandatory time limits prescribed under Section 153 apply to a final assessment order passed pursuant to Dispute Resolution Panel (DRP) directions under Section 144C, and whether an order passed beyond this limit is invalid. Facts Assessment Year: The case… Read More »
Revised Return Does Not Delay Interest on Original Claim; Interest Ends on DD Issue Date Issue Period of Interest (Revised Return): Whether interest under Section 244A is payable from the beginning of the Assessment Year for the refund claimed in the original return, or if filing a revised return shifts the start date for the… Read More »
Compounding Fee For Old Pending Case Computed Under 2008 Guidelines Not New 2024 Guidelines Issue Whether the compounding fee for an offence related to Assessment Year 2002-03 should be calculated based on the revised CBDT Guidelines of 2024 or the earlier Guidelines of 2008, particularly when the matter was remanded by the High Court for… Read More »
Additions Deleted as Retraction of Surrender Validly Supported by Books Vouchers and Bank Withdrawals Issue Unexplained Gold: Whether excess gold jewellery found during a survey could be treated as unexplained investment when the assessee claimed it belonged to customers for repairs. Unexplained Cash: Whether cash found in excess of the cash book balance is unexplained… Read More »
Co-insurance Fees Allowed Without TDS and Computer Peripherals Treated as Revenue Expenditure Issue Co-insurance Fees: Whether administration fees paid for co-insurance attract TDS under Section 194H, failing which the expense is disallowable under Section 40(a)(ia). Nature of Expenses: Whether expenditure on computer consumables (pen drives, cables, etc.) is capital in nature (as held by the… Read More »
Allocation Method Upheld but Excise Refund Taxed; MAT Indexation Allowed Issue Expense Allocation (S. 80-IE): Can the AO substitute the assessee’s division-wise expense allocation with a turnover-based method without proving the assessee’s method perverse? MAT on Excise Refund (S. 115JB): Is excise duty/GST refund includible in book profits for MAT purposes? Business Expenditure (S. 37):… Read More »
Interest Income Earned from Staff Loans and Advances is Taxable as Business Income Issue Whether interest income earned by an assessee, engaged in the business of electricity distribution, from loans and advances given to its staff constitutes ‘Income from Business’ under Section 28(i) or ‘Income from Other Sources’ under Section 56. Facts Nature of… Read More »
Reassessment Valid on Fresh Material but Fictitious Loss Allegations Rejected on Merits Issue Reassessment Validity: Whether the reopening of assessment under Section 147 was valid based on information from the Investigation Wing regarding alleged fictitious losses. Genuineness of Losses: Whether losses claimed from trading in illiquid stock options and alleged “penny stocks” were genuine business… Read More »