IMPORTANT INCOME TAX CASE LAWS 02.02.2026 Relevant Act Section Case Law Title Brief Summary Citation Income-tax Act, 1961 Section 43(1) Puri Oil Mills Ltd. v. ACIT/DCIT [Subsidy ≠ Cost Reduction] Capital subsidy received for setting up a small hydro power project is a financial support for industrial expansion. It cannot be reduced from the “Actual… Read More »
Excessive Recovery via Refund Adjustment During Pending Appeal 1. The Core Dispute: Recovery vs. Stay of Demand The central issue in this case involves the Assessing Officer (AO) adjusting current income tax refunds against a disputed penalty (under Section 270A) from a previous year that is currently under appeal. The Problem: The Income Tax Department… Read More »
Depreciation Must Be “Actually Allowed” to Invoke Section 50 Taxation 1. The Core Dispute: Mandatory Depreciation vs. Statutory Reality The case revolves around the sale of two motor cars by an assessee, resulting in a capital loss. The assessee sought to set off this loss against Long-Term Capital Gains (LTCG) arising from the sale of… Read More »
State Transport Corporation vs. Revenue (Multiple Assessment Years) 1. Conversion of Loan Interest into Equity (Section 41(1)) The Assessing Officer (AO) argued that converting outstanding interest into equity share capital constituted a “remission or cessation” of liability, making it taxable as deemed profit. Legal Analysis: Section 41(1) applies when a taxpayer obtains a benefit through… Read More »
ITAT Rules: Revised Audit Report Correcting Professional Error Must Be Considered in Rectification 1. The Core Dispute: A “Copy-Paste” Professional Error The assessee faced a tax demand due to a mechanical addition made during the processing of their return under Section 143(1). The Error: The Chartered Accountant (CA) filed a Tax Audit Report (TAR) in… Read More »
Case Summary: ITAT Rules on Sikkim Resident Exemptions, Genuine Gifts, and Cash Loan Penalties I. Exemption for “Old Settlers” of Sikkim (Section 10(26AAA)) The primary issue involved whether an individual, residing in Sikkim since before its merger with India but not holding a “Sikkim Subject Certificate,” could claim income tax exemption. The Dispute: The Assessing… Read More »
Case Summary: Capital Subsidy for Industrial Growth vs. Reduction of Asset Cost (Section 43(1)) 1. The Core Dispute: “Purpose Test” vs. Cost Meeting The Assessing Officer (AO) argued that the capital subsidy received by the assessee for setting up a 1.40 MW Small Hydro Power (SHP) Project was directly related to the acquisition of plant… Read More »
IMPORTANT INCOME TAX CASE LAWS 02.02.2026 Relevant Act Section Case Law Title Brief Summary Citation IGST Act, 2017 Section 13(8)(b) Commissioner of Delhi GST v. Global Opportunities (P.) Ltd. [Landmark SC Victory for Consultants] The Supreme Court dismissed the Revenue’s SLP, confirming that education consultants are not intermediaries. Providing counseling to students for foreign universities… Read More »
The Core Dispute: Alleged Retained ITC Benefits The case originated from a complaint alleging that a real estate developer failed to pass on the benefit of Input Tax Credit (ITC) that became available following the transition from the pre-GST regime to the GST regime (July 1, 2017). 1. Scope of Investigation: The “OC” Cut-off The… Read More »
Anticipatory Bail Denied: Punjab & Haryana High Court Flags Systematic ITC Fraud and Exchequer Loss 1. The Core Allegations: Fake Invoicing and Systematic Fraud The petitioner (Jitender Saharan) sought anticipatory bail in a case involving an alleged multi-crore GST fraud detected by the Directorate General of GST Intelligence (DGGI). The Modus Operandi: The investigation revealed… Read More »