INCOME TAX CASE LAWS 04.08.2026

Section	Relevant Act	Case Law Title	Citation	Brief Summary
Section 2	Prohibition of Benami Property Transactions Act, 1988	Chhotelal v. Moolchand Lodhi	Click Here	Property purchased in the name of a child or out of joint family funds is excluded from the definition of a benami transaction; a civil suit challenging its sale is not barred under Section 4 and cannot be rejected under Order VII Rule 11 CPC.
Section 2(9)	Prohibition of Benami Property Transactions Act, 1988	Raksha Bullion v. Initiating Officer, Deputy Commissioner of Income-tax	Click Here	Post-demonetisation RTGS credits from entities managed by another person without a legitimate business justification led to the appellant being treated as the beneficial owner, justifying provisional attachment; denial of cross-examination caused no prejudice.
Section 9	Income-tax Act, 1961	Royal Multisports (P.) Ltd. v. ACIT	Click Here	Cost-to-cost reimbursements to an overseas group entity for IPL marketing required thorough verification by the AO to determine whether actual services were rendered and if withholding tax provisions under the India-UK DTAA applied.
Section 9	Income-tax Act, 1961	GE India Industrial (P.) Ltd. v. ACIT (OSD)	Click Here	Under non-discrimination clauses of India-USA and India-China DTAAs, disallowance under Section 40(a)(i) for non-deduction of TDS on payments to non-residents must be restricted to 30% instead of 100%.
Section 10(23G)	Income-tax Act, 1961	IDFC Ltd. v. Assistant Commissioner of Income-tax	Click Here	Underwriting commission qualifies as ‘interest’ and structuring fees fall within ‘other charges’ relating to borrowed monies; both are eligible for exemption under Section 10(23G).
Section 12AB	Income-tax Act, 1961	National Library v. Commissioner of Income-tax (Exemptions)	Click Here	CIT(E) cannot attach caveats making Section 12AB registration/Section 80G approval conditional on the outcome of a prospective Supreme Court appeal when granting approval pursuant to a High Court order.
Section 12AB	Income-tax Act, 1961	Bai Nemtullabai a Maskati Trust v. Commissioner of Income-tax (Exemptions)	Click Here	Conditional caveats attached to Section 12AB/80G approvals subject to a potential Supreme Court appeal create unwarranted uncertainty and must be deleted.
Section 28	Income-tax Act, 1961	A.T. Kearney Ltd. v. Deputy Commissioner of Income-tax	Click Here	Claim for legal/professional fees by a foreign branch post-business transfer to an Indian subsidiary remanded to the AO for de novo assessment due to unclear facts regarding retained assets and business purpose.
Section 28(i)	Income-tax Act, 1961	Superior Projects LLP v. Income-tax Officer	Click Here	Disallowance of derivative losses from illiquid stock options was justified as trades executed via stock exchanges were found to be pre-arranged and manipulated to generate artificial losses.
Section 32	Income-tax Act, 1961	Royal Multisports (P.) Ltd. v. ACIT	Click Here	Assessee acquiring IPL franchise rights is entitled to claim depreciation on the entire actual capitalized cost under the agreement, not just on the annual installment amounts paid during the year.
Section 36(1)(va)	Income-tax Act, 1961	Rithwik Projects (P.) Ltd. v. ACIT	Click Here	Delay in depositing PF/ESI employee contributions caused by government-imposed COVID-19 lockdown conditions should not be disallowed under Section 36(1)(va) upon production of evidentiary proof.
Section 36(1)(va)	Income-tax Act, 1961	GE India Industrial (P.) Ltd. v. ACIT (OSD)	Click Here	Disallowing delayed PF/ESI contributions made before the ITR filing due date is beyond the permissible scope of adjustments under Section 143(1) processing.
Section 36(1)(vii)	Income-tax Act, 1961	IDFC Ltd. v. Assistant Commissioner of Income-tax	Click Here	Deductions under Section 36(1)(viia)(c) (provision for bad debts) and Section 36(1)(viii) operate independently; one deduction does not reduce the eligibility of the other.
Section 37(1)	Income-tax Act, 1961	Rithwik Projects (P.) Ltd. v. ACIT	Click Here	Interest paid on late remittance of statutory TDS is penal in nature rather than compensatory and cannot be claimed as an allowable business expenditure.
Section 37(1)	Income-tax Act, 1961	Rithwik Projects (P.) Ltd. v. ACIT	Click Here	Genuine business purchases backed by invoices and payment proofs cannot be disallowed solely because suppliers failed to respond to notices issued under Section 133(6).
Section 37(1)	Income-tax Act, 1961	Royal Multisports (P.) Ltd. v. ACIT	Click Here	Business research and support service payments were rightly disallowed as the assessee failed to furnish documentation, agreements, or proof of actual services rendered.
Section 37(1)	Income-tax Act, 1961	Royal Multisports (P.) Ltd. v. ACIT	Click Here	Claim for player/staff accommodation costs restored to the AO for verification as hotel bills and details of occupants were missing from the record.
Section 37(1)	Income-tax Act, 1961	Royal Multisports (P.) Ltd. v. ACIT	Click Here	Security expenses incurred for brand ambassadors and key managerial personnel during IPL operations are allowable as business promotion expenses despite the individuals lacking formal positions.
Section 37(1)	Income-tax Act, 1961	Royal Multisports (P.) Ltd. v. ACIT	Click Here	Management service fees paid to a related concern for an individual director’s services were disallowed as no proof of extra services beyond regular duties was provided.
Section 37(1)	Income-tax Act, 1961	Royal Multisports (P.) Ltd. v. ACIT	Click Here	Ad-hoc partial disallowances of web and marketing expenses made by CIT(A) without specific material or cogent reasoning cannot be sustained.
Section 40(a)(ia)	Income-tax Act, 1961	Skyline Greathills Skyline Sparkle v. Deputy Commissioner of Income-tax	Click Here	Section 40(a)(ia) applies strictly to business income; where profits are assessed under ‘Capital Gains’, disallowance under this section cannot be sustained.
Section 40(a)(ia)	Income-tax Act, 1961	GE India Industrial (P.) Ltd. v. ACIT (OSD)	Click Here	Re-disallowance of 30% interest payable to MSMEDs that was already suo motu disallowed by the assessee remanded to AO to prevent double disallowance.
Section 40A(3)	Income-tax Act, 1961	Royal Multisports (P.) Ltd. v. ACIT	Click Here	Cash per diem payments exceeding statutory limits to players/staff attract Section 40A(3) disallowance regardless of contractual agreements unless covered by Rule 6DD.
Section 45	Income-tax Act, 1961	Skyline Greathills Skyline Sparkle v. Deputy Commissioner of Income-tax	Click Here	Transfer of restored development and reversionary rights upon JDA termination generates taxable ‘Capital Gains’ rather than business income.
Section 45	Income-tax Act, 1961	Skyline Greathills Skyline Sparkle v. Deputy Commissioner of Income-tax	Click Here	Surplus from voluntary transfer of restored development rights is not a tax-free capital receipt if no compensation was received for destruction of profit-making apparatus.
Section 45	Income-tax Act, 1961	Skyline Greathills Skyline Sparkle v. Deputy Commissioner of Income-tax	Click Here	Provisions created for encroachment removal and title dispute settlements have a direct nexus to conveying clear title and are deductible from capital gains (quantum subject to AO verification).
Section 50	Income-tax Act, 1961	Rithwik Projects (P.) Ltd. v. ACIT	Click Here	Assets destroyed by flash floods must be written off from the block; the resulting loss is an operational business loss, not a capital loss under Section 50.
Section 69A	Income-tax Act, 1961	Income-tax Officer v. Radhey Kishan	Click Here	Reassessment opened on capital gains grounds but concluded under Section 69A as unexplained money without making any addition on the original ground is invalid and void.
Section 69A	Income-tax Act, 1961	Principal Commissioner of Income-tax v. Arunkumar Ramniklal Mehta	Click Here	Additions for foreign bank balances deleted where Revenue failed to prove ownership or operation of HSBC Geneva accounts by the assessee.
Section 69C	Income-tax Act, 1961	Motley Logistics (P.) Ltd. v. Principal Commissioner of Income-tax	Click Here	Revision order under Section 263 is unsustainable where the AO had already conducted adequate inquiries into party-wise transportation expenses and ledgers during assessment.
Section 72	Income-tax Act, 1961	Royal Multisports (P.) Ltd. v. ACIT	Click Here	Assessing Officer directed to verify prior assessment records and grant statutory set-off of eligible brought forward business losses.
Section 80GGC	Income-tax Act, 1961	Manoj Jayram Sarang v. Income-tax Officer	Click Here	Deduction for political donation denied despite banking channel payment because the political party functioned as a conduit for bogus accommodation entries.
Section 147	Income-tax Act, 1961	Superior Projects LLP v. Income-tax Officer	Click Here	Jurisdictional challenges to reopening validity (Section 151 sanction and limitation) raised for the first time before ITAT remanded to CIT(A) for adjudication.
Section 151	Income-tax Act, 1961	Principal Commissioner of Income-tax v. Chokkalingam Thangavel	Click Here	Notice under Section 148 issued beyond 3 years without approval from the specified high-ranking authority (e.g., PCCIT) under Section 151 is illegal and invalid.
Section 151	Income-tax Act, 1961	Kanumolu Pacs Ltd. v. Income-tax Officer	Click Here	Reassessment initiated after 3 years without Section 151(ii) specified authority sanction suffers from a fatal jurisdictional defect that is not curable under Section 292BB/292BC.
Section 153A	Income-tax Act, 1961	Principal Commissioner of Income-tax v. Arunkumar Ramniklal Mehta	Click Here	In completed assessments, Section 153A additions cannot be made using pre-existing Revenue information (e.g., HSBC Base Notes) without incriminating material seized during search.
Section 199	Income-tax Act, 1961	Rithwik Projects (P.) Ltd. v. ACIT	Click Here	TDS credit on mobilization advance cannot be denied merely due to apportionment difficulty across assessment years when advance was adjusted against bills and income offered.
Section 199	Income-tax Act, 1961	GE India Industrial (P.) Ltd. v. ACIT (OSD)	Click Here	Denied TDS/TCS credits belonging to amalgamating companies remanded to AO for verification and grant of credit to the amalgamated entity.
Section 199	Income-tax Act, 1961	Royal Multisports (P.) Ltd. v. ACIT	Click Here	Uncredited TDS and interest under Section 244A claims restored to the AO for verification of Form 26AS/TDS certificates and grant of statutory relief.
Section 270AA	Income-tax Act, 1961	Neuland Laboratories Ltd v. ACIT	Click Here	Rejection of Section 270AA penalty immunity for non-payment of demand requires re-examination when subsequent rectification deleted the underlying demand and generated a refund.