INCOME TAX CASE LAW 13.08.2026

Relevant Act	Section	Case Law Title	Citation	Brief Summary
Income-tax Act, 1961	2(14)	Akhilesh Bansal v. ITO, Ward 1 (1)	Click Here	Rural agricultural land located beyond 8 km from municipal limits is not a capital asset under Section 2(14)(iii); hence, enhanced compulsory acquisition compensation is not taxable under Section 45(5).
Income-tax Act, 1961	5	Trichirapalli District Central Co-Operative Bank Ltd. v. ACIT	Click Here	Merely crediting overdue interest on NPAs to P&L does not create taxable income on an accrual basis when real realization is uncertain (Real Income Principle).
Income-tax Act, 1961	10(10B)	Raju Goral v. ITO	Click Here	Compensation received by BSNL employees under the BSNL VRS 2019 scheme constitutes retrenchment compensation exempt under Section 10(10B) rather than Section 10(10C).
Income-tax Act, 1961	10(26AAB)	Krishi Utpadan Mandi Samiti Badaun v. ITO	Click Here	Claiming exemption under Section 10(23C) in the initial return does not preclude an Agricultural Produce Market Committee from claiming Section 10(26AAB) exemption during rectification if statutory conditions are met.
Income-tax Act, 1961	36(1)(viia)	Trichirapalli District Central Co-Operative Bank Ltd. v. ACIT	Click Here	Deduction for bad & doubtful debts is to be computed on total outstanding advances at month-end (including opening balance); unclear breakup of provision reversals requires fresh examination by AO.
Income-tax Act, 1961	41(1)	Trichirapalli District Central Co-Operative Bank Ltd. v. ACIT	Click Here	Transfer of excess notional NPA provision to P&L as an NPA reserve release cannot be taxed under Section 41(1) if it doesn’t relate to an actual write-off allowed under Section 36(1)(vii).
Income-tax Act, 1961	48	PCIT v. Rinki Shashikant Gandhi	Click Here	Deduction allowed for payments made to clear a charge on property during capital gain computation is not erroneous/prejudicial to Revenue if no prior mortgage/loan was taken by assessee; Section 263 revision set aside.
Income-tax Act, 1961	56	Akhilesh Bansal v. ITO, Ward 1 (1)	Click Here	Interest on enhanced compensation under Sec 28 of Land Acquisition Act is an accretion to compensation; if the underlying land compensation is non-taxable, interest cannot be taxed under Income from Other Sources.
Income-tax Act, 1961	56	ITO- 9(1)(1) v. Divya Arun Goradia	Click Here	Section 56(2)(x) is not attracted where an assessee already possessed, paid for, and enjoyed ownership of property in prior years, and only formal registration took place during the current year without fresh consideration.
Income-tax Act, 1961	68	Grace Infrastructure (P.) Ltd. v. PCIT	Click Here	A Section 263 revision order passed merely to beat limitation, without examining a revised return based on post-demerger audited accounts, reflects non-application of mind and is liable to be remanded.
Income-tax Act, 1961	68	Vikas Singhal v. ITO	Click Here	Reassessment notice alleging non-disclosure is arbitrary and invalid if complete bank account details were already furnished and accessible to the AO during original scrutiny assessment.
Income-tax Act, 1961	69A	Navjeevan Dharmi Associates v. PCIT	Click Here	SLP Dismissed: Assessing undisclosed income (declared under IDS 2016 without proof of source) as unexplained money under Sec 69A instead of business income is justified when Sec 142(1) notices are ignored.
Income-tax Act, 1961	69A	Madhubhai Shambhubhai Sojitra v. ITO	Click Here	Ex-parte assessment confirming cash deposits as unexplained money was remanded to the AO with costs imposed on the assessee due to failure to respond to multiple previous notices.
Income-tax Act, 1961	69A	PCIT v. Rakesh Kumar	Click Here	Where undisclosed income additions are based strictly on outside-the-books entries (and not cash seizures), applying the peak credit principle by adjusting debits against credits is legally permissible.
Income-tax Act, 1961	80P	Unnat Nagar CHS Ltd. v. PCIT-41	Click Here	Section 263 revision is improper where AO allowed Sec 80P(2)(d) deduction after due examination on a return filed under Sec 148 notice, even if return was not filed under Sec 139(1).
Income-tax Act, 1961	153	Consolidated Finvest and Holdings Ltd. v. DCIT	Click Here	Referrals to DVO for property valuation under general Section 142A (instead of special Section 50C) do not extend the statutory assessment completion time limit under Section 153.
Income-tax Act, 1961	201	State Bank of India v. ITO, TDS	Click Here	SBI branches complying with High Court interim directions regarding LTC overseas travel reimbursements cannot be treated as “assessee-in-default” under Sec 201(1) or charged Sec 201(1A) interest.
Income-tax Act, 1961	244A	Yashita Finance (P.) Ltd. v. PCIT	Click Here	Even if DTVSV Scheme rules restrict interest under Sec 244A, the Revenue cannot delay payments indefinitely; refunds must be issued promptly (preferably within 90 days of Form No. 4).
Income-tax Act, 1961	270A	ITO- 9(1)(1) v. Divya Arun Goradia	Click Here	Penalty under Section 270A is purely consequential; once the underlying addition under Section 56(2)(x)(b) is deleted in appeal, the penalty cannot stand independently.
Income-tax Act, 1961	271(1)(c)	Trichirapalli District Central Co-Operative Bank Ltd. v. ACIT	Click Here	Disallowance based on statutory interpretation differences does not equate to concealment of income or furnishing inaccurate particulars; Section 271(1)(c) penalty cannot be levied.
Income-tax Act, 1961	271(1)(c)	PCIT v. Mahesh G. Garodia	Click Here	SLP Dismissed: Penalty notice that fails to strike off the irrelevant limb (concealment vs. furnishing inaccurate particulars) suffers from fatal ambiguity, invalidating the penalty levy.