Monthly Archives: March 2025

11 IMPORTANT INCOME TAX CASE LAW 19.02.2025 Sr No Case Law Title Brief Summary Citation Relevant Section and Act 1 Magadi Planning Authority v. Income-tax Officer A town planning authority engaged in public welfare activities is considered a charitable institution. Click Here   Section 2(15) Income Tax Act, 1961 2 Principal Commissioner of Income-tax 5… Read More »

Provisional Attachment of Bank Accounts Upheld to Protect Revenue Issue: Whether the provisional attachment of bank accounts under Section 281B of the Income-tax Act, 1961, is valid when the assessee’s assets are deemed insufficient to satisfy potential tax dues. Facts: A large sum of unexplained cash was seized from a car in which the assessee… Read More »

Settlement Commission can accept a settlement application even if the exact nature of the undisclosed income is not clear. Settlement Commission’s Admission of Application Upheld; No Interference Warranted Issue: Whether the Settlement Commission’s decision to admit an application under Section 245C(1) of the Income-tax Act, 1961, is valid when the assessee has disclosed undisclosed income… Read More »

Unexplained Cash and Jewelry Additions Deleted Due to Insufficient Evidence Key Issues and Decisions: I. Unexplained Cash Addition: Issue: Whether a cash addition made under Section 69A is justified when the assessee explains that the cash was withdrawn from their company but fails to explain why it was withdrawn. Decision: The court held that the… Read More »

Reopening of assessment  due to unpaid VAT is not valid if no new material facts are brought on record. Reassessment for Disallowed VAT Expenses Set Aside as Change of Opinion Issue: Whether the reassessment and disallowance of VAT expenses under Section 43B of the Income-tax Act, 1961, are valid when the Assessing Officer (AO) reopened… Read More »

Revision Order Quashing ESOP Expense Disallowance Set Aside Issue: Whether the Principal Commissioner (Pr. Commissioner) was justified in invoking revisionary jurisdiction under Section 263 of the Income-tax Act, 1961, to disallow the deduction of Employee Stock Option Plan (ESOP) costs incurred by the holding company and reimbursed by the assessee. Facts: The assessee, a subsidiary… Read More »

 Admissibility of Digital Evidence, Business Income Computation, and R&D Deductions Key Issues and Decisions: I. Admissibility of Digital Evidence: Issue: Whether digital evidence (data from a pen drive) found during a search and seizure operation is admissible without a certificate under Section 65B(4) of the Indian Evidence Act, 1872. Decision: The court held that even… Read More »

 Exemption under Section 10(38) Allowed for Long-Term Capital Gains from Shares Issue: Whether the exemption claimed under Section 10(38) of the Income-tax Act, 1961, for long-term capital gains on the sale of shares can be denied on the grounds that the shares were penny stocks used for generating bogus gains. Facts: The assessee filed a… Read More »

Tax Exemption Granted to Town Planning Authority for Public Welfare Activities Key Issues and Decisions: I. Charitable Purpose and Tax Exemption: Issue: Whether a town planning authority, created under the Karnataka Town and Country Planning Act, 1961, qualifies for tax exemption under Sections 11 and 12 of the Income-tax Act, 1961, for its public welfare… Read More »