Monthly Archives: February 2026

IMPORTANT INCOME TAX CASE LAWS 20.02.2026 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 is an impermissible “change of opinion.” Notice held time-barred as extended 6-year limit cannot… Read More »

Remand for Fresh Registration under Section 12AB and Validity of 80G Approval under Amended Finance Act 2024 Provisions 1. Registration under Section 12AB: Right to Adjournment The assessee-trust, focused on promoting Vedic studies and feeding the poor, faced a rejection of its Section 12AB registration application. The Commissioner (Exemptions) denied an adjournment request and rejected… Read More »

Documentary Evidence Overrides Non-Appearance: Share Capital Additions Deleted for Satisfying the Triple Test of Section 68 1. The Core Dispute: Documentary Evidence vs. Investigative Suspicion The Assessing Officer (AO) made an addition under Section 68 by treating share capital and share premium from nine corporate subscribers as “unexplained cash credits.” The AO labeled the assessee’s… Read More »

Interest Under Section 28 of Land Acquisition Act Held as Capital Receipt, Not Taxable as Income from Other Sources 1. The Core Dispute: Capital Receipt vs. Revenue Receipt The assessee received “interest” on enhanced compensation for land acquired by the government. The Assessing Officer (AO) classified this interest as Income from Other Sources (IFOS) under… Read More »

Substitution of SDV under Section 50C Invalidated by Rectified Deed; Section 54F Exemption Upheld Based on Possession Date Rather than Booking Date 1. Stamp Duty Valuation & Section 50C Deeming Provision The Assessing Officer (AO) substituted the declared sale consideration of a plot (₹1.19 crores) with the Stamp Duty Value (SDV) of ₹1.88 crores under… Read More »

Reassessment Quashed: NRI’s Property Purchase Proved via Bank Loans; Income Escaping Assessment Below ₹50 Lakh Threshold for Extended Limitation 1. The Core Dispute: Property Investment vs. Source of Funds The assessee, a Non-Resident Indian (NRI), purchased a residential house. The Revenue department, acting on information from the Sub-Registrar regarding the high-value transaction, initiated reassessment proceedings… Read More »

Business Commencement, Audit Fees, and Loan Waivers 1. Commencement of Business for Tax Deductions The Assessing Officer (AO) disallowed business expenses, arguing the assessee had not “commenced” business. The Court examined the distinction between setting up a business and full-scale operations. The Ruling: The Court held that for claiming deductions like audit fees, a time-bound… 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 »