Monthly Archives: January 2026

Co-operative Societies: Section 80P Deduction Scope Clarified & Souharda Status Confirmed Detailed Analysis of Issues 1. Souharda Societies are “Co-operative Societies” (Section 2(19)) Issue: The Revenue often denies Section 80P deductions to entities registered under the Karnataka Souharda Sahakari Act, 1997, arguing they technically aren’t “co-operative societies” under the Income Tax Act. Decision: The Tribunal… Read More »

Section 80-IA Deduction Allowed for Road Projects; SLP Dismissed on Delay and Merit   Issue Whether an assessee executing road projects awarded by the Government is eligible for deduction under Section 80-IA(4) as a “Developer” of infrastructure facilities, or if they are merely executing a “Works Contract” (which is ineligible), and whether the Supreme Court… Read More »

Section 50C Not Applicable if Rectified DVO Value is Lower than Sale Consideration   Issue Whether the provisions of Section 50C (deeming Stamp Duty Value as sale consideration) apply if the Fair Market Value (FMV) determined by the Departmental Valuation Officer (DVO)—after correcting for errors regarding area and occupancy—is actually lower than the consideration received… Read More »

Analysis of Recent Tax Ruling: Employee Incentives, Transfer Pricing (BPO vs. KPO), and SEZ Cost Allocation 1. Deduction of Employee Incentives (Section 43B vs. Severance) Issue: The assessee claimed a deduction of Rs. 8.99 crore for an “executive gain sharing plan” (incentive/bonus). The AO disallowed it entirely as a “non-crystallized liability.” The CIT(A) allowed the… Read More »

Retention Money Taxable Only on Receipt; IBC Liquidation Noted by Supreme Court   Issue Whether “Retention Money” withheld by a contractee (Power Grid Corporation) pending satisfactory completion of a project accrues as income in the year it is retained, or if it is taxable only in the year it is actually received, especially when the… Read More »

TDS Credit Follows Legal Ownership & Registered Deeds; Unregistered Family Arrangement Rejected   Issue Whether an assessee can claim credit for Tax Deducted at Source (TDS) on the sale of a property based on an unregistered family arrangement, when the registered sale deed and the TDS certificates are in the names of his wife and… Read More »

IMPORTANT INCOME TAX CASE LAWS 21.01.2026 Relevant Act Section Case Law Title Brief Summary Citation Income-tax Act, 1961 Section 192 / 194A DCIT(TDS) v. Novartis Healthcare (P.) Ltd. • ESOP: TDS liability arises at the time of exercise, not grant. • MSME Interest: Interest paid for delayed payments to MSMEs is penal/compensatory and not “interest”… Read More »

Section 80G Approval Denied: Outsourcing Hospital & Low Charitable Spend is Not “Charity”   Issue Whether a trust is entitled to approval under Section 80G if it outsources its primary medical facility to a third party in exchange for a percentage of turnover, and its actual spending on charitable relief is disproportionately low compared to… Read More »

ITR Utility Cannot Restrict Assessee’s Right to Choose Beneficial Set-Off of Losses   Issue Whether an online Income Tax Return (ITR) utility can prevent an assessee from choosing the order of setting off losses (specifically Short-Term Capital Loss) against gains, resulting in a higher tax liability, when Section 70 of the Income-tax Act permits such… Read More »

Tribunal cannot reverse CIT(A)’s relief without proving “Perversity”; Section 68 Addition Deleted   Issue Whether the Income Tax Appellate Tribunal (ITAT) can reverse a relief granted by the Commissioner (Appeals) regarding unexplained cash credits (Section 68) without demonstrating that the Commissioner’s appreciation of evidence was perverse, legally erroneous, or based on a misreading of facts.… Read More »