INCOME TAX CASE LAWS 09.07.2026
INCOME TAX CASE LAWS 09.07.2026
| Section | Case Law Title / Notification | Brief Summary | Citation | Relevant Act |
| Section 10(23EE) & Section 11 / Sch III | Notification: S.O. 3683(E) & S.O. 3684(E), Dtd 07-07-2026 | CBDT notifies the Core Settlement Guarantee Fund set up by National Commodity Clearing Limited (NCCL) for tax exemption for AYs 2019-20 to 2026-27 (under 1961 Act) and from Tax Year 2026-27 onwards (under 2025 Act). | Click Here | Income-tax Act, 1961 & Income-tax Act, 2025 |
| Section 2(47) | Raju Jamnadas Babani v. DCIT | Capital gains on a registered agreement for sale executed during the previous year are taxable in that year itself. Being the absolute owner, the entire gain is assessable in the assessee’s hands despite a subsequent family settlement. |
2026
|
2wIncome-tax Act, 1961 |
| Section 5 | ACIT v. Canara Bank | Unrealized gains arising from the year-end revaluation of forward foreign exchange contracts are not taxable in view of earlier binding precedents in the bank’s own case. |
2026
|
Income-tax Act, 1961 |
| Section 11 | Piramal Swasthya Management and Research Institute v. ACIT | Reassessment initiated solely due to the manual (non-electronic) filing of Form 10, where the claim under section 11(2) was already examined and accepted in the original assessment, is illegal and set aside. |
2026
|
Income-tax Act, 1961 |
| Section 12AB | Aditya Birla Education Trust v. CIT(E) | Where the Tribunal has already decided the grounds against a registration rejection and no stay operates, the CIT(E) cannot reject the renewal of registration based on the exact same grounds. |
2026
|
Income-tax Act, 1961 |
| Section 14A | ACIT v. Canara Bank | Where the assessee’s own funds exceed its investments and bank securities constitute stock-in-trade, the disallowance was correctly restored for recomputation as per judicial precedents. |
2026
|
Income-tax Act, 1961 |
| Section 28(i) | ACIT v. Canara Bank | Interest on securities that has accrued but is not due as of the financial year-end is not taxable. |
2026
|
Income-tax Act, 1961 |
| Section 28(i) | Wipro Industries Ltd. v. ACIT | Commission income earned by an IT trading company assessed under business income must be taxed at the normal rates applicable to business profits, not at any special or higher rate. |
2026
|
Income-tax Act, 1961 |
| Section 31 | CIT v. Super Spinning Mills Ltd. | The expenditure on the replacement of plant and machinery by a textile mill qualifies as “current repairs” only if it passes the Supreme Court’s tests regarding the nature of replacement and useful life; the matter was remanded for verification. |
2026
|
Income-tax Act, 1961 |
| Section 32 | ACIT v. Bata India Ltd. | Disallowance of depreciation on a river bank embankment and renovation is unsustainable when the same had been allowed as part of the block of assets in the immediately preceding year on identical facts. |
2026
|
Income-tax Act, 1961 |
| Section 32 | ACIT v. Canara Bank | Automated Teller Machines (ATMs) are to be treated as computers and are eligible for a higher depreciation rate of 60 percent. |
2026
|
Income-tax Act, 1961 |
| Section 32 | ACIT v. Canara Bank | Depreciation on leased assets is allowable since the jurisdictional High Court had already decided the issue in favour of the bank. |
2026
|
Income-tax Act, 1961 |
| Section 36(1)(va) | Maa Harsiddhi Infra Developers (P.) Ltd. v. ACIT | A prima facie adjustment disallowing employees’ EPF/ESI contributions under section 143(1)(a) is improper because the issue was highly debatable with divergent High Court views pending before the Supreme Court at the time. |
2026
|
Income-tax Act, 1961 |
| Section 36(1)(viia) | ACIT v. Canara Bank | The deduction for bad debts for banks cannot be restricted by excluding the profits of overseas branches or by considering only fresh rural advances for computing aggregate average advances under Rule 6ABA. |
2026
|
Income-tax Act, 1961 |
| Section 36(1)(viii) | ACIT v. Canara Bank | Deduction under this section regarding reserves created by financial corporations is to be recomputed based on the Tribunal’s earlier orders, subject to verification by the AO. |
2026
|
Income-tax Act, 1961 |
| Section 37(1) | ACIT v. Canara Bank | Depreciation on investments classified under HTM (Held to Maturity), AFS (Available for Sale), and HFT (Held for Trading) categories is allowable. |
2026
|
Income-tax Act, 1961 |
| Section 37(1) | ACIT v. Canara Bank | Corporate Social Responsibility (CSR) expenditure is allowable since it had already been held allowable in the assessee’s own case for earlier years. |
2026
|
Income-tax Act, 1961 |
| Section 37(1) | ACIT v. Bata India Ltd. | The matter regarding the scientific basis and actual utilization of warranty provisions was remanded to the AO for fresh factual verification due to lack of examined supporting documents. |
2026
|
Income-tax Act, 1961 |
| Section 37(1) | ACIT v. Bata India Ltd. | Lease rent expenditure recognized on a straight-line basis in accordance with AS-19 cannot be denied merely on the ground that it is notional, as there is no contrary provision under the Act. |
2026
|
Income-tax Act, 1961 |
| Section 37(1) | ACIT v. Bata India Ltd. | Royalty payments accepted as revenue expenditure under the same agreement in earlier years cannot be treated as capital expenditure by the AO when there is no change in facts or law. |
2026
|
Income-tax Act, 1961 |
| Section 56 | Vinit Ramnath Parkar v. ITO | An addition under section 56(2)(x)(b)(B) for the difference between the stamp duty value and purchase consideration of a flat must be restricted to the assessee’s proportionate beneficial ownership, not added entirely if purchased jointly. |
2026
|
Income-tax Act, 1961 |
| Section 56 | Vinit Ramnath Parkar v. ITO | A plea to adopt the stamp duty value as on the date of the allotment letter under the first proviso is not acceptable, as an allotment letter is a preliminary document, not a registered agreement for sale. |
2026
|
Income-tax Act, 1961 |
| Section 69A | Wipro Industries Ltd. v. ACIT | Cash deposits during the demonetization period cannot be treated as unexplained merely on suspicion when bank records show sufficient preceding cash withdrawals to support the redeposits. |
2026
|
Income-tax Act, 1961 |
| Section 69A | Wipro Industries Ltd. v. ACIT | Repetitive, pre-arranged intra-group transactions lacking commercial purpose amount to circular trading. Commission on such turnover is rightly added on an estimate basis, without allowing telescoping or exclusion of intra-group sales. |
2026
|
Income-tax Act, 1961 |
| Section 72 | Wipro Industries Ltd. v. ACIT | The set-off of brought forward business losses that were disallowed in an earlier year (which is currently under appeal) should be allowed contingent upon the final outcome of that specific appeal. |
2026
|
Income-tax Act, 1961 |
| Section 80-IA | Pandesara Infrastructure Ltd. v. ACIT | Reopening an assessment on the ground that applying a higher depreciation rate reduced the business profits of a company paying MAT is a mere change of opinion, rendering the reassessment notice unsustainable. |
2026
|
Income-tax Act, 1961 |
| Section 80-IB | ITO v. Shreeji Associates | A deduction under section 80IB(10) for a housing project cannot be denied in an earlier year based on an alleged violation (funding employee purchases via partner loans) that occurred in a later financial year. |
2026
|
Income-tax Act, 1961 |
| Section 80-IB | ITO v. Shreeji Associates | Denial of a deduction based on an alleged single-allottee restriction violation using untested statements without cross-examination or corroborative evidence is unjustified when documentary proof supports individual allotments. |
2026
|
Income-tax Act, 1961 |
| Section 80P | Ismailia Co-operative Credit Society Ltd. v. ACIT | Interest earned by a co-operative credit society by parking surplus funds in bank deposits is attributable to its core business of providing credit to members, making it eligible for deduction under Section 80P(2)(a). |
2026
|
Income-tax Act, 1961 |
| Section 92C | ACIT v. Bata India Ltd. | The Arm’s Length Price (ALP) of technical support services cannot be determined as ‘nil’ by the TPO if the assessee provides clear evidence of commercial benefits and the TPO does not dispute the CUP method or comparability. |
2026
|
Income-tax Act, 1961 |
| Section 115BBE | Wipro Industries Ltd. v. ACIT | Where the primary addition under section 69A has been deleted by the Tribunal, the consequential application of the enhanced tax rate under section 115BBE does not survive. |
2026
|
Income-tax Act, 1961 |
| Section 115JB | ACIT v. Canara Bank | The provisions relating to Minimum Alternate Tax (MAT) under section 115JB are not applicable to banking companies. |
2026
|
Income-tax Act, 1961 |
| Section 220 | Paresh M. Shetti v. PR. CIT | Adjusting a subsequent year’s refund against a past demand is unsustainable if the Revenue cannot prove that the initial intimation/demand notice under section 143(1) was ever issued and served on the assessee. |
2026
|
Income-tax Act, |