INCOME TAX CASE LAWS 01.10.20226

Relevant Act	Section	Case Law Title	Citation	Brief Summary
Income-tax Act, 1961	11	Kathir Foundation v. Director of Income-tax	Click Here	Where a charitable trust violates section 13, exemption under section 11 is denied only for the non-conforming investment income (taxed at maximum marginal rate under proviso to section 164(2)), not the entire income.
Income-tax Act, 1961	11	Rana Educational Trust v. Income-tax Officer	Click Here	When exemption is denied for lack of registration and non-filing of Form 10BB, revenue must compute taxable income as per law rather than simply taxing gross receipts without allowing expenditure.
Income-tax Act, 1961	14A	Jindal Combines (P.) Ltd. v. Deputy Commissioner of Income-tax	Click Here	In the absence of any exempt income earned during the year, no disallowance under section 14A read with Rule 8D can be made.
Income-tax Act, 1961	14A	Deputy Commissioner of Income-tax v. Tata Communications Ltd.	Click Here	Assessee cannot retract a suo motu disallowance without proving it factually erroneous; however, further Rule 8D disallowance is unsustainable in the absence of exempt income.
Income-tax Act, 1961	14A	Principal Commissioner of Income-tax-2 v. TATA Industries Ltd.	Click Here	Section 14A disallowance cannot exceed the actual amount of exempt income earned during the year (restricted to Rs. 6.16 crores).
Income-tax Act, 1961	24	Jindal Combines (P.) Ltd. v. Deputy Commissioner of Income-tax	Click Here	Interest on borrowings (including refinanced loans) for let-out property construction is deductible under section 24(b) if direct nexus/utilisation is established.
Income-tax Act, 1961	28(i)	Deputy Commissioner of Income-tax v. Tata Communications Ltd.	Click Here	Interest from short-term bank deposits of temporarily deployed Treasury funds has direct nexus with operations and is taxable as business income.
Income-tax Act, 1961	32	Deputy Commissioner of Income-tax v. Tata Communications Ltd.	Click Here	Goodwill recorded on acquisition of an ISP business qualifies as an intangible asset under section 32(1)(ii) and is eligible for depreciation.
Income-tax Act, 1961	32	Deputy Commissioner of Income-tax v. Tata Communications Ltd.	Click Here	Upfront payment for commercial-use lease rights is capital expenditure eligible for depreciation on WDV; Tribunal can entertain claims per section 254 without Goetze restrictions.
Income-tax Act, 1961	32	Deputy Commissioner of Income-tax v. Tata Communications Ltd.	Click Here	Global Delivery System (GDS) integrated into computer architecture qualifies for 60% depreciation as ‘computers’; WDV verification restored to AO.
Income-tax Act, 1961	32	Deputy Commissioner of Income-tax v. Tata Communications Ltd.	Click Here	Depreciation on a block of assets cannot be denied merely because individual assets (Iridium assets) were idle due to technological obsolescence, as the block is the unit for WDV.
Income-tax Act, 1961	37(1)	Principal Commissioner of Income-tax-2 v. TATA Industries Ltd.	Click Here	Upfront brokerage and debenture issue expenses are fully deductible as revenue expenditure in the year incurred; revenue cannot force deferred amortization.
Income-tax Act, 1961	80-IA	Deputy Commissioner of Income-tax v. Tata Communications Ltd.	Click Here	A separate NLD unit with distinct license, network, and accounts qualifies as an independent undertaking under section 80-IA(4)(ii); CA certificate in Form 10CCB satisfies section 80-IA(7).
Income-tax Act, 1961	92C	Deputy Commissioner of Income-tax v. Tata Communications Ltd.	Click Here	Foreign currency loans to Singapore AEs benchmarked at USD LIBOR plus 1.75% are at arm’s length based on matching foreign currency borrowings.
Income-tax Act, 1961	92C	Deputy Commissioner of Income-tax v. Tata Communications Ltd.	Click Here	Charging AEs LIBOR plus 1.75% on overdue receivables matches terms for non-AEs with comparable delays, serving as an internal CUP with no further adjustment needed.
Income-tax Act, 1961	92C	Deputy Commissioner of Income-tax v. Tata Communications Ltd.	Click Here	Guarantee commission on corporate guarantees provided to AEs adopted at 0.33% ALP based on precedent for prior assessment years.
Income-tax Act, 1961	92C	Deputy Commissioner of Income-tax v. Tata Communications Ltd.	Click Here	Arm’s length fee for Letters of Comfort and Letters of Support issued to banks for AEs adopted at 0.20%, aligned with subsequent APA rates.
Income-tax Act, 1961	92CA	Principal Commissioner of Income Tax v. Himatsingka Seide Ltd.	Click Here	Whether abatement under section 153A renders a prior TPO determination non-est requiring a fresh reference is a substantial question of law warranting appeal admission.
Income-tax Act, 1961	148	Prakashchandra Gamanlal Kantliwala v. Income-tax Officer	Click Here	Section 148 notice issued to a deceased assessee without serving the legal representative in that specific capacity is invalid and non-est.
Income-tax Act, 1961	148	Kuppusamy Tharmaraj Pakkirisamy v. Income-tax Officer	Click Here	Reassessment completed under section 147/144 in the name of a deceased individual after being notified of death is invalid and liable to be quashed.
Income-tax Act, 1961	156	Sanghvi Forging and Engineering Ltd. v. Deputy Commissioner of Income-tax	Click Here	Income-tax claims not included in an NCLT-approved Resolution Plan under sections 30 & 31 stand extinguished; consequential demand notices are unsustainable.
Income-tax Act, 1961	199	Deputy Commissioner of Income-tax v. Tata Communications Ltd.	Click Here	Merger-related TDS credit cannot be denied solely due to non-reflection in Form 26AS if physical TDS certificates are produced; restored to AO for verification.
Income-tax Act, 1961	234B	Deputy Commissioner of Income-tax v. Tata Communications Ltd.	Click Here	Interest under section 234B must be recomputed/deleted in accordance with law following a modified return filed pursuant to an Advance Pricing Agreement (APA).
Income-tax Act, 1961	234D	Deputy Commissioner of Income-tax v. Tata Communications Ltd.	Click Here	Interest granted earlier under section 244A must be included when computing section 234D interest on excess refund.
Income-tax Act, 1961	244A	Deputy Commissioner of Income-tax v. Tata Communications Ltd.	Click Here	Interest on refund under section 244A runs up to the date of actual payment/credit, not merely up to the date of the refund order.
Income-tax Act, 1961	260A	Principal Commissioner of Income Tax v. Himatsingka Seide Ltd.	Click Here	A 341-day delay in filing appeal due to transfer of search records across states and administrative approvals constitutes bona fide delay warranting condonation.