Monthly Archives: August 2026

Interest Earned by Co-operative Housing Society from Co-operative Bank Investments Qualifies for Section 80P(2)(d) Deduction

By | August 1, 2026
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Interest Earned by Co-operative Housing Society from Co-operative Bank Investments Qualifies for Section 80P(2)(d) Deduction Issue Whether interest income earned by a co-operative housing society from fixed deposits placed with co-operative banks is eligible for deduction under Section 80P(2)(d) of the Income-tax Act, 1961. Facts The assessee is a co-operative housing society that invested surplus… Read More »

Company Performing Broader Auto Component Functions Qualifies as Comparable and Brought Forward Losses Must Be Set Off

By | August 1, 2026
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Company Performing Broader Auto Component Functions Qualifies as Comparable and Brought Forward Losses Must Be Set Off Issue Whether a company manufacturing core auto components, compressors, and filters qualifies as a valid functional comparable under TNMM, and whether the Assessing Officer must grant set-off of brought forward business losses omitted in the final tax computation… Read More »

Supreme Court Dismisses Revenue SLP, Affirming Section 153C Proceedings Invalid Without Direct Incriminating Search Material

By | August 1, 2026
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Supreme Court Dismisses Revenue SLP, Affirming Section 153C Proceedings Invalid Without Direct Incriminating Search Material Issue Whether Section 153C assessment proceedings can be validly initiated against a third party based on unlinked search data and documents obtained post-search without any direct incriminating material found during the search. Facts A search under Section 132 was conducted… Read More »

Supreme Court Affirms JV Agreement Termination Receipts Non-Taxable Under Section 55(2)

By | August 1, 2026
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Supreme Court Affirms JV Agreement Termination Receipts Non-Taxable Under Section 55(2) Supreme Court Affirms JV Agreement Termination Receipts Non-Taxable Under Section 55(2) Issue Whether compensation received by an assessee on the termination of a joint venture agreement for intangible assets/rights is taxable under Section 55(2) of the Income-tax Act, 1961, for Assessment Year 1998–99. Facts… Read More »

No Disallowance Under Section 40(a)(ia) for Short Deduction and Section 14A Disallowance Inapplicable to Book Profits

By | August 1, 2026
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No Disallowance Under Section 40(a)(ia) for Short Deduction and Section 14A Disallowance Inapplicable to Book Profits Issue Whether deducting tax under a wrong TDS provision (Section 194C instead of Section 194I) triggers disallowance under Section 40(a)(ia), and whether disallowance under Section 14A read with Rule 8D can be added back while computing book profit under… Read More »

ITAT Rules Interest Paid to Overseas Head Office Deductible and Restricts Guarantee Commission Adjustment

By | August 1, 2026
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ITAT Rules Interest Paid to Overseas Head Office Deductible and Restricts Guarantee Commission Adjustment Issue Whether interest paid by an Indian Permanent Establishment (PE) to its foreign Head Office is deductible, and whether Transfer Pricing adjustments on guarantee commission must give credit for amounts already recovered from the Associated Enterprise (AE). Facts The assessee is… Read More »

ITAT Remands Defect Liability Expense Issue and Allows Bad Debts and PF/ESI Deductions

By | August 1, 2026
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ITAT Remands Defect Liability Expense Issue and Allows Bad Debts and PF/ESI Deductions Issue Whether expenses incurred during a contractual Defect Liability Period (DLP) are allowable under Section 37(1), bad debts written off meet the criteria under Section 36(1)(vii), and employees’ PF/ESI contributions deposited within statutory due dates are allowable under Section 36(1)(va). Facts Defect… Read More »

Write-Off of Expired Inventory and Bad Debts Allowable as Business Expenditure Based on Verified Evidence

By | August 1, 2026
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Write-Off of Expired Inventory and Bad Debts Allowable as Business Expenditure Based on Verified Evidence Issue Whether the write-off of expired finished goods inventory and bad debts supported by physical verification and independent accounting reports are allowable deductions under Sections 37(1) and 36 of the Income-tax Act, 1961. Facts The assessee claimed a deduction for… Read More »

Reassessment Initiated to Revisit Section 10AA Claim Examined in Scrutiny Is Void as a Change of Opinion

By | August 1, 2026
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Reassessment Initiated to Revisit Section 10AA Claim Examined in Scrutiny Is Void as a Change of Opinion Reassessment Initiated to Revisit Section 10AA Claim Examined in Scrutiny Is Void as a Change of Opinion Issue Whether a reassessment notice issued under Section 148 to revisit and disallow a Section 10AA SEZ deduction—which was specifically queried,… Read More »

High Court Rejects Section 10A/80IA(10) Additions Absent Finding of Extraordinary Counterparty Profits

By | August 1, 2026
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High Court Rejects Section 10A/80IA(10) Additions Absent Finding of Extraordinary Counterparty Profits Issue Whether additions under Section 10A(7) read with Section 80IA(10) can be sustained solely based on a transfer pricing margin comparison without establishing that transactions with counterparties yielded more than ordinary profits. Facts The assessee claimed deduction under Section 10A for the Assessment… Read More »