IMPORTANT INCOME TAX CASE LAWS 18.11.2025
| Relevant Act | Section | Case Law Title | Brief Summary | Citation |
| Income-tax Act, 1961 | Section 2(47) (Transfer) | DCIT v. Mathikere Ramaiah Seetharam | Entering into a Joint Development Agreement (JDA) where the owner receives a revenue share does not convert the asset into stock-in-trade. No transfer of property occurs under 2(47)(v) or (vi) solely by signing the JDA if possession/control remains. | Click Here |
| Income-tax Act, 1961 | Section 4 (Capital vs. Revenue) | Innovative Cuisine (P.) Ltd. v. ACIT | Subsidies for new projects are often capital receipts. However, due to the failure to produce capital work-in-progress ledgers, the matter was remanded to verify the actual accounting treatment in the books. | Click Here |
| Income-tax Act, 1961 | Section 9 / India-Oman DTAA | ACIT v. Bahwan Cybertek (P.) Ltd. | Assessees are entitled to Foreign Tax Credit (FTC) on dividends from subsidiaries even if no tax was actually paid in the source country (Oman) due to local exemptions, provided the DTAA allows “tax sparing” or specific credits. | Click Here |
| Income-tax Act, 1961 | Section 14A (Expenditure on Exempt Income) | Dodia Dairy Ltd. v. DCIT | Reiterates the established law that disallowance under Section 14A cannot exceed the actual exempt income earned by the assessee during the relevant financial year. | Click Here |
| Income-tax Act, 1961 | Section 32 (Depreciation) | Joshi Technologies International Inc India Projects v. ACIT | Extraction of mineral oil is treated as “manufacture or production.” Thus, the assessee is eligible for additional depreciation under 32(1)(iia) and a higher 60% rate on oil field equipment. | Click Here |
| Income-tax Act, 1961 | Section 36(1)(va) (Employee Contributions) | Bhargab Engineering Works v. PCIT | Delayed payments of Employee PF/ESI contributions are not deductible if paid after the due date under the respective Acts. Failure by the AO to disallow this justifies Revision under Section 263. | Click Here |
| Income-tax Act, 1961 | Section 37(1) (Business Expenditure) | Assistant Commissioner of Income-tax v. Bahwan Cybertek (P.) Ltd. | Hardware/software procured solely to fulfill customer contracts is revenue expenditure, not capital, as it creates no enduring benefit or intangible asset for the assessee’s own business. | Click Here |
| Income-tax Act, 1961 | Section 54F (Exemption) | Anil Hanumant Choudhari v. Income-tax Officer | Investment in a residential house jointly with a spouse using proceeds from the sale of plots is valid for 54F deduction. Disallowance based on minor stamp duty mismatches requires factual reconsideration. | Click Here |
| Income-tax Act, 1961 | Section 68 (Cash Credit) | Raja pushpa properties (P.) Ltd. v. Assessment Unit | Assessment was upheld even without cross-examination where the assessee failed to provide PAN and creditworthiness details of lenders despite repeated notices, thus not violating natural justice. | Click Here |
| Income-tax Act, 1961 | Section 80IB(9) (Oil & Gas Deduction) | Joshi Technologies International Inc India Projects v. ACIT | Under a production sharing contract, each oil well can be treated as a separate industrial undertaking for the purpose of claiming deduction under Section 80IB(9). | Click Here |
| Income-tax Act, 1961 | Section 92B / 92C (Transfer Pricing) | Assistant Commissioner of Income-tax v. Bahwan Cybertek (P.) Ltd. | Corporate Guarantee is a deemed international transaction (post-2012 amendment). However, the fee should be benchmarked at a standard rate of 0.5% on the total guarantee amount. | Click Here |
| Income-tax Act, 1961 | Section 151 (Sanction for Reopening) | Imran Majeed v. Income-tax Officer | Reassessment was quashed as the sanction was obtained from the wrong authority. For notices issued after 3 years, approval must come from the Principal Chief Commissioner (as per 151(ii)}$), not the Principal Commissioner. | Click Here |
| Income-tax Act, 1961 | Section 153C (Search Assessment) | Ador Ceramic (P.) Ltd. v. DCIT/ACIT | Assessment based on third-party materials without allowing the assessee to cross-examine the witness is a violation of natural justice. Matter remanded for a fresh hearing with cross-examination rights. | Click Here |
For More :- Read IMPORTANT INCOME TAX CASE LAWS 16.12.25