Daily Archives: February 23, 2026

Reassessment Quashed: NRI’s Property Purchase Proved via Bank Loans; Income Escaping Assessment Below ₹50 Lakh Threshold for Extended Limitation 1. The Core Dispute: Unexplained Investment vs. Bank Finance The Revenue initiated reassessment proceedings against an NRI taxpayer following information from the Sub-Registrar regarding a high-value residential property purchase. The Assessing Officer (AO) initially suspected that… Read More »

High Court Reverses Interest Disallowance on Business Commencement and Audit Fees Due to Consistency. I. Commencement of Business (Section 37(1)) Issue: Can a company claim revenue expenses if it hasn’t started its primary operations (SEZ/Real Estate) during the year? Held (Assessee): The business is deemed to have commenced once it is “set up” and ready… Read More »

Full Interest Deduction for Let-Out Property Upheld; No Lender Certificate Required Under Section 24(b) Provisos 1. The Core Dispute: Interest Limits & The Certificate Requirement The assessee claimed a deduction for interest on a housing loan under Section 24(b) against rental income from a let-out property. The original assessment was completed under Section 143(3). Later,… Read More »

Milan Theatres Pvt. Ltd. v. DCIT (2026): Landmark Victory for Real Estate Developers on Project Completion Method and Section 45(2) Consistency 1. Rejection of Accounting Method (Section 145) The assessee, a real estate developer, followed the Project Completion Method (PCM), recognizing revenue only when the “Milan Mall” was finished. The Assessing Officer (AO) rejected this,… Read More »

Supreme Court Permits Revenue to Bring Retrospective Clarifications to High Court in Challenge Against JAO-Issued Reassessment Notices 1. The Core Dispute: Exclusive vs. Concurrent Jurisdiction The central legal question was whether the Jurisdictional Assessing Officer (JAO) has the authority to issue a reassessment notice under Section 148 after the introduction of the Faceless Assessment Scheme… Read More »

Bombay High Court Rules Against Reassessment Based on Audit Objections; Holds Change of Opinion and Limitation Period as Absolute Bars 1. Core Dispute: Audit Objection vs. Full Disclosure The assessee, a company, was originally assessed under Section 143(3) for AY 2016-17, where the Assessing Officer (AO) specifically scrutinized MD remuneration and professional fees. No disallowance… Read More »

IMPORTANT INCOME TAX CASE LAWS 23.02.2026 Relevant Section Case Law Title Core Ruling & Strategic Summary Citation Section 147 / 149 Sapphire Foods India Ltd. v. ACIT [Audit Objection Shield] Reopening based solely on Audit Party objections regarding previously disclosed expenses amounts to an impermissible “change of opinion.” Notice held time-barred as extended 6-year limit… Read More »