IMPORTANT INCOME TAX CASE LAWS 02.02.2026

Relevant Act	Section	Case Law Title	Brief Summary	Citation
Income-tax Act, 1961	Section 43(1)	Puri Oil Mills Ltd. v. ACIT/DCIT	[Subsidy ≠ Cost Reduction] Capital subsidy received for setting up a small hydro power project is a financial support for industrial expansion. It cannot be reduced from the “Actual Cost” of assets for computing depreciation.	Click Here
Income-tax Act, 1961	Section 10(26AAA)	Roshan Agarwal v. DCIT	[Sikkim Exemption] Old settlers of Sikkim (domiciled prior to 26.04.1975) are entitled to the tax exemption at par with Sikkim Subject certificate holders. Membership in an Old Settlers Association is a valid proof.	Click Here
Income-tax Act, 1961	Section 36(1)(va)	Jyotiben Niranjan Jani v. DCIT	[Audit Report Correction] Where a CA mistakenly reported PF/ESI figures belonging to another client, the assessee has a right to file a revised audit report. AO must verify the correction before making disallowances.	Click Here
Income-tax Act, 1961	Section 41(1)	CIT v. Tamil Nadu State Transport Corp.	[Equity Conversion] Converting outstanding interest payable to the Government into Equity Share Capital is not a “remission or cessation” of liability. It is a change in the form of capital and not taxable as profit.	Click Here
Income-tax Act, 1961	Section 50	Amit Bholanath Mishra v. ACIT	[Depreciation is Optional] If no depreciation was ever claimed or allowed on a motor car, the AO cannot forcibly recompute a higher WDV using Explanation 6 to Section 43(6) to deny a loss set-off upon its sale.	Click Here
Income-tax Act, 1961	Section 220	Fork Media Group (P.) Ltd. v. CPC	[Excess Refund Adjustment] AO cannot adjust more than 20% of a disputed demand against a refund without specific directions from the Principal Commissioner. Blanket adjustments of full refunds are illegal.	Click Here

For More :- Read IMPORTANT INCOME TAX CASE LAWS 31.01.2026