INCOME TAX CASE LAWS 21.07.2026

Relevant Act	Section	Case Law Title	Citation	Brief Summary
Black Money Act, 2015	Section 2	Vijendra Kedia v. DDIT (Inv.) & ACIT	Click Here	Notice/assessment quashed as a Not Ordinarily Resident was not an ‘assessee’ under Section 2(2) at notice issuance.
Black Money Act, 2015	Section 10	Vijendra Kedia v. DDIT (Inv.) & ACIT	Click Here	Additions/penalties on foreign shares bought out of non-taxable Indian income were unsustainable due to wrong valuation.
Benami Property Act, 1988	Section 2	V. Viswanath Kamath v. V. Balakrishna Kamath	Click Here	Claiming mother was a name-lender in a joint property sale deed was not barred as a benami transaction under Section 3.
Income-tax Act, 1961	Section 5	Sterling Holiday Resorts Ltd. v. DCIT	Click Here	Deferral of vacation home sales revenue over entitlement period consistent with past practice was upheld.
Income-tax Act, 1961	Section 10(10B)	Ravikiran Damodar Kudade v. ITO	Click Here	Ex-gratia paid to BSNL VRS-2019 retirees constitutes capital-nature ‘Retrenchment Compensation’ and is fully tax-exempt.
Income-tax Act, 1961	Section 12AB	Lodha Park Jain Sangh v. ITO (C)	Click Here	Rejection of trust registration for picking the wrong clause in Form 10AB is a curable procedural error requiring re-evaluation on merits.
Income-tax Act, 1961	Section 14A	ACIT v. JSW Steel Ltd.	Click Here	No interest disallowance under Rule 8D(2)(ii) when interest-free funds suffice; Section 14A disallowance cannot be added to Section 115JB book profit.
Income-tax Act, 1961	Section 14A	Mahindra and Mahindra Financial Services Ltd. v. DCIT	Click Here	Rule 8D applies prospectively from AY 2008-09; prior years require disallowance on a reasonable basis.
Income-tax Act, 1961	Section 28(i)	ACIT v. JSW Steel Ltd.	Click Here	NPV gain on pre-payment of deferred sales tax liability is a non-taxable capital receipt and excluded from Section 115JB book profit.
Income-tax Act, 1961	Section 28(iv)	ACIT v. JSW Steel Ltd.	Click Here	Write-back of project creditors related to asset acquisition does not trigger income under Section 41(1) or Section 28(iv).
Income-tax Act, 1961	Section 32	Mahindra and Mahindra Financial Services Ltd. v. DCIT	Click Here	Uninterruptible Power Supply (UPS) is part of a computer system qualifying for a 60% depreciation rate.
Income-tax Act, 1961	Section 36(1)(vii)	ACIT v. JSW Steel Ltd.	Click Here	Unrecovered property advances were not deductible as bad debts/business expenditure without showing integral connection to ordinary business operations.
Income-tax Act, 1961	Section 36(1)(vii)	ACIT v. JSW Steel Ltd.	Click Here	Write-off of business loans/interest to overseas subsidiaries previously offered to tax is deductible as bad debt or business loss.
Income-tax Act, 1961	Section 36(1)(vii)	ACIT v. JSW Steel Ltd.	Click Here	Unrecovered security deposits for leased business premises written off post-arbitration are allowable as bad debt or business loss.
Income-tax Act, 1961	Section 37	DCIT v. Polycab India Ltd.	Click Here	Consultancy disallowance supported by invoices/TDS cannot stand on retracted statements or unverified loose papers.
Income-tax Act, 1961	Section 37(1)	ACIT v. JSW Steel Ltd.	Click Here	CIT(A) properly entertained ESOP deduction claims made via revised computation without a revised tax return.
Income-tax Act, 1961	Section 37(1)	Mahindra and Mahindra Financial Services Ltd. v. DCIT	Click Here	Commission/brokerage paid to non-responding parties under Section 133(6) can be disallowed, but not without initiating an inquiry first.
Income-tax Act, 1961	Section 37(1)	Sterling Holiday Resorts Ltd. v. DCIT	Click Here	ESOP expenses claimed upon option exercise are non-contingent and allowable as business expenditure.
Income-tax Act, 1961	Section 37(1)	Sterling Holiday Resorts Ltd. v. DCIT	Click Here	Prior-period expense claim remanded to AO due to lack of verification on whether expenses crystallized during the year.
Income-tax Act, 1961	Section 45	ACIT v. JSW Steel Ltd.	Click Here	Capital reduction in overseas subsidiaries resulting in share extinguishment yields an allowable capital loss (or business loss).
Income-tax Act, 1961	Section 50C	Bhupendra Abhimanyu Kukreja v. ITO	Click Here	Recomputation of capital gains must adopt DVO valuation over stamp duty value when referenced under Section 50C(2).
Income-tax Act, 1961	Section 50C	Bhupendra Abhimanyu Kukreja v. ITO	Click Here	No Section 50C addition is warranted if the variation between sale price and DVO’s unrealistic hypothetical model is under 15%.
Income-tax Act, 1961	Section 68	DCIT v. Polycab India Ltd.	Click Here	Profit additions for unaccounted sales based solely on third-party statements/WhatsApp chats without stock/cash discrepancies were deleted.
Income-tax Act, 1961	Section 68	DCIT v. Polycab India Ltd.	Click Here	Post-search cash sales additions deleted as parallel records/third-party retractions lacked corroborative physical/independent evidence.
Income-tax Act, 1961	Section 68	Pahwa Buildtech (P.) Ltd. v. CIT(A)	Click Here	Share application money supported by ITR/bank details discharged onus; proof of ‘source of source’ was not required for AY 2011-12.
Income-tax Act, 1961	Section 68	Pahwa Buildtech (P.) Ltd. v. CIT(A)	Click Here	Unsecured loans repaid via banking channels and backed by lender creditworthiness details cannot be treated as unexplained cash credits.
Income-tax Act, 1961	Section 69A	DCIT v. Polycab India Ltd.	Click Here	Additions based solely on loose sheets found at an employee’s home without cash/asset nexus to the assessee are unsustainable.
Income-tax Act, 1961	Section 69C	DCIT v. Polycab India Ltd.	Click Here	Unexplained land purchase expenditure estimated uniformly at 20% on-money based on generic statements was set aside.
Income-tax Act, 1961	Section 69C	DCIT v. Polycab India Ltd.	Click Here	Additions relying on employee loose sheets and retracted statements without recipient details failed Section 69C conditions.
Income-tax Act, 1961	Section 69C	DCIT v. Polycab India Ltd.	Click Here	Uniform extrapolation of alleged cash salary expenses across multiple years based on retracted statements was deleted.
Income-tax Act, 1961	Section 69C	ACIT v. JSW Steel Ltd.	Click Here	Section 69C additions relying on untested third-party statements without cross-examination opportunities were deleted.
Income-tax Act, 1961	Section 72A	Sterling Holiday Resorts Ltd. v. DCIT	Click Here	Set-off/carry-forward of losses disallowed as demerger share allotment by a holding company violated Sections 2(19AA)(iv) and 2(41A).
Income-tax Act, 1961	Section 92C	ACIT v. JSW Steel Ltd.	Click Here	State electricity board tariff for industrial consumers accepted as CUP for captive power transfers.
Income-tax Act, 1961	Section 92C	ACIT v. JSW Steel Ltd.	Click Here	Foreign currency loan interest benchmarked via Thomson Reuters LPC (CUP) upheld over TPO’s Bloomberg LIBOR-plus approach.
Income-tax Act, 1961	Section 92C	ACIT v. JSW Steel Ltd.	Click Here	Corporate guarantee commission rate restricted to 0.35% (down from 2% proposed by TPO) per past precedent.
Income-tax Act, 1961	Section 132B	Kamal Kumar Khetawat v. UOI	Click Here	Interest @ 0.5%/month payable on refunded seized cash after 120 days from search end, despite pending vigilance references.
Income-tax Act, 1961	Section 144B	Noel Villas and Apartments v. ACIT	Click Here	Skipping oral hearing didn’t violate natural justice when ‘Seek Video Conferencing’ option wasn’t opted for by the assessee.
Income-tax Act, 1961	Section 144B	Noel Villas and Apartments v. ACIT	Click Here	Partnership firm is not an eligible assessee under Section 144C(15)(b); issuing a draft assessment order was not mandatory.
Income-tax Act, 1961	Section 149	Madhav Power (P.) Ltd. v. ACIT	Click Here	Extended 10-year reopening limit includes the search AY; notices issued outside this block are time-barred.
Income-tax Act, 1961	Section 151	Konda Giri Goud v. ITO	Click Here	Reopening notice beyond 3 years quashed as sanction was obtained from PCIT instead of the higher authority required under Section 151(ii).
Income-tax Act, 1961	Section 153	Noel Villas and Apartments v. ACIT	Click Here	Assessment completed on 28.09.2022 was valid as the statutory deadline for AY 2020-21 was extended to 30.09.2022.
Income-tax Act, 1961	Section 270A	Mithibai College Employees Co-op Credit Soc. v. ITO	Click Here	Penalty for under-reporting/misreporting deleted as deduction denial was due to a PAN status glitch without proven misreporting.
Income-tax Act, 1961	Section 276CC	Rakesh Bhailalbhai Gandhi v. ITO	Click Here	Prosecution against an ex-director for non-filing of tax return quashed as he resigned before FY end and return due date.