IMPORTANT INCOME TAX CASE LAWS 22.01.2026
| Relevant Act | Section | Case Law Title | Brief Summary | Citation |
| Income-tax Act, 1961 | Section 5 (Accrual) | PCIT v. EMC Ltd. | [Retention Money] Retention money is a deferred payment contingent upon satisfactory completion. The assessee has no vested right to receive it in the year of retention; thus, it accrues only in the year of actual receipt. (SLP disposed of due to IBC proceedings). | Click Here |
| Income-tax Act, 1961 | Section 10AA / 92C | Acuity Knowledge Centre (India) (P.) Ltd. v. DCIT | [Cost-Plus Model] If the AO reallocates/disallows costs in a cost-plus mark-up model, they must make a corresponding upward adjustment to the revenue to maintain the agreed mark-up percentage. Otherwise, the result is artificial. | Click Here |
| Income-tax Act, 1961 | Section 50C | Mukesh Vaikunthlal Mehta v. ITO | [Valuation Error] A DVO valuation for Section 50C purposes must factor in tenancy rights which depress the property value. Excluding tenant-occupied areas while valuing developer flats is incorrect. The addition was deleted as the rectified FMV was lower than the actual consideration. | Click Here |
| Income-tax Act, 1961 | Section 80-IA(4) | PCIT (Central) v. Montecarlo Ltd. | [Developer vs Contractor] The Supreme Court dismissed the Revenue’s SLP, confirming that an assessee entering into a Development Agreement (assuming risk/investment) is eligible for Section 80-IA(4) deduction, unlike a pure “Works Contractor.” | Click Here |
| Income-tax Act, 1961 | Section 80P | Akshaya Co-op Credit Society Ltd. v. ITO | [Souharda Sahakari] A society registered under the Karnataka Souharda Sahakari Act falls within the definition of a Co-operative Society (Section 2(19)) and is eligible for Section 80P deductions. | Click Here |
| Income-tax Act, 1961 | Section 139 (Delay) | Sikkim Ferro Alloys Ltd. v. CBDT | [Technical Glitch] A delay of merely 8 minutes in filing the return (due to portal issues) was condoned by the High Court to prevent the “grave hardship” of denying the carry-forward of significant business losses. | Click Here |
| Income-tax Act, 1961 | Section 153C (Limitation) | Swagat Infrastructure (P.) Ltd. v. DCIT | [Search Assessment Time-Bar] Where a High Court stay is vacated with only a few days left in the limitation period, the extension is limited to 60 days (under the Proviso to Explanation 1 to Section 153). The 12-month extension under Section 153(6)(i) does not apply to search assessments. Order passed beyond 60 days was quashed. | Click Here |
| Income-tax Act, 1961 | Section 199 (TDS Credit) | Jerambhai Ratnabhai Patel v. CPU | [Credit follows Name] TDS credit cannot be claimed by an individual if the TDS certificate and sale deed are in the names of his wife and son (legal owners), even if he claims it was a family arrangement. Credit belongs to the deductees named. | Click Here |
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