INCOME TAX CASE LAWS 06.11.2026

Relevant Act	Section	Case Law Title	Citation	Brief Summary
Income-tax Act, 1961	Section 9	ACIT, Central Circle-1(1) v. Sesa Resources Ltd.	Click Here	Demurrage paid to non-resident buyers in export transactions was not chargeable to tax in India; hence, no TDS was required under Section 195 and disallowance under Section 40(a)(ia) was unwarranted.
Income-tax Act, 1961	Section 9	ACIT, Central Circle-1(1) v. Sesa Resources Ltd.	Click Here	Export commission paid to non-residents lacking a Permanent Establishment (PE) in India did not attract TDS, making disallowance under Section 40(a)(i) inapplicable.
Income-tax Act, 1961	Section 10(5)	State Bank of India v. Deputy Commissioner of Income-tax (TDS)	Click Here	Non-deduction of TDS on LTC/LFC foreign travel reimbursements, executed under binding interim directions of the Madras High Court, could not be treated as a default under Section 201(1).
Income-tax Act, 1961	Section 14A	ACIT, Central Circle-1(1) v. Sesa Resources Ltd.	Click Here	When computing the 0.5% disallowance under Rule 8D(iii), only investments actually yielding or capable of yielding exempt income must be considered.
Income-tax Act, 1961	Section 14A	ACIT, Central Circle-1(1) v. Sesa Resources Ltd.	Click Here	Interest disallowance under Section 14A is unwarranted when the assessee possesses sufficient interest-free funds to cover exempt income-yielding investments and no borrowed funds were shown to be utilized.
Income-tax Act, 1961	Section 15	Anand Kakarla v. ITO	Click Here	Where actual salary received from an LLP was claimed to be lower than declared due to confusion with partner remuneration, the matter was remitted to the AO to verify salary via Form 16, employer confirmation, and bank statements.
Income-tax Act, 1961	Section 17	Federal Bank Executive Forum v. Union Bank of India	Click Here	Interest-free or concessional loans granted to bank employees are taxable perquisites; valuing them under Rule 3(7)(i) using SBI’s Prime Lending Rate (PLR) is valid and constitutional.
Income-tax Act, 1961	Section 28	Anand Kakarla v. ITO	Click Here	Remuneration of ₹24 lakhs received by a partner from an LLP is taxable as business income under Section 28(v) rather than professional receipts eligible for presumptive taxation under Section 44ADA.
Income-tax Act, 1961	Section 28(i)	ACIT, Central Circle-1(1) v. Sesa Resources Ltd.	Click Here	Foreign exchange losses incurred on canceling forward contracts booked to hedge export transaction risks are allowable as business losses and not speculative losses.
Income-tax Act, 1961	Section 32	ACIT, Central Circle-1(1) v. Sesa Resources Ltd.	Click Here	Where 50% additional depreciation is claimed in the first year for assets acquired in the second half of the previous year, the remaining 50% must be allowed in the subsequent year.
Income-tax Act, 1961	Section 32	ACIT, Central Circle-1(1) v. Sesa Resources Ltd.	Click Here	Upheld CIT(A)’s order granting depreciation on UPS systems at 60%, following precedent established in the assessee’s own case for prior assessment years.
Income-tax Act, 1961	Section 32	ACIT, Central Circle-1(1) v. Sesa Resources Ltd.	Click Here	Additional depreciation on plant and machinery used in mining activities was held allowable, following a settled position in the parent company’s case.
Income-tax Act, 1961	Section 37(1)	ACIT, Central Circle-1(1) v. Sesa Resources Ltd.	Click Here	Compensatory Afforestation expenditure is allowable as revenue expenditure, amortized over the mining lease period proportional to the ore extracted.
Income-tax Act, 1961	Section 37(1)	ACIT, Central Circle-1(1) v. Sesa Resources Ltd.	Click Here	Expenses incurred on constructing or improving public roads to facilitate iron ore transport near mines are allowable as revenue expenditure as no enduring capital asset is created.
Income-tax Act, 1961	Section 37(1)	ACIT, Central Circle-1(1) v. Sesa Resources Ltd.	Click Here	Ship repair and maintenance expenses required for operational and regulatory compliance are allowable as revenue expenditure since they do not create new assets or enduring advantages.
Income-tax Act, 1961	Section 37(1)	Galactus Funware Technology (P.) Ltd. v. Deputy Commissioner of Income-tax	Click Here	Online gaming portal business expenses claimed against fake invoices without proof of service receipt were rightly disallowed under Section 37(1).
Income-tax Act, 1961	Section 37(1)	Freudenberg Galal Household Product (P.) Ltd. v. Deputy Commissioner of Income-tax	Click Here	Expenses for support services received from Associated Enterprises (AEs) with established business nexus and contemporaneous proof were allowable under Section 37(1).
Income-tax Act, 1961	Section 41(1)	HDFC Bank Ltd. v. Deputy Commissioner of Income-tax	Click Here	Matter remanded to the AO to reconcile bad debt recovery credited to the P&L account against Section 143(1) adjustments under Section 41 to prevent double taxation.
Income-tax Act, 1961	Section 45	ACIT, Central Circle-1(1) v. Sesa Resources Ltd.	Click Here	Profits from selling securities held as investments (not stock-in-trade) are taxable as capital gains, regardless of transaction volume or frequency.
Income-tax Act, 1961	Section 90	HDFC Bank Ltd. v. Deputy Commissioner of Income-tax	Click Here	Foreign Tax Credit (FTC) claimed in return with Form 67 must be granted after due verification under Sections 90/91 read with Rule 128.
Income-tax Act, 1961	Section 92C	Freudenberg Galal Household Product (P.) Ltd. v. Deputy Commissioner of Income-tax	Click Here	Determining ALP at NIL for support services received from AEs without applying prescribed methods or benchmarks is unsustainable when actual service delivery and benefits are shown.
Income-tax Act, 1961	Section 92C	Galactus Funware Technology (P.) Ltd. v. Deputy Commissioner of Income-tax	Click Here	A comparable company in the ITeS segment lacking specific service details and possessing significantly higher turnover must be excluded from ALP determination.
Income-tax Act, 1961	Section 92C	Galactus Funware Technology (P.) Ltd. v. Deputy Commissioner of Income-tax	Click Here	Entities holding major brand intangibles, large scale, and high turnover must be excluded from comparables when benchmarking a software service provider with modest turnover.
Income-tax Act, 1961	Section 92C	Galactus Funware Technology (P.) Ltd. v. Deputy Commissioner of Income-tax	Click Here	Companies operating with significantly larger turnover and brand-backed assets are to be excluded from comparables for captive ITeS providers due to asset and scale differences.
Income-tax Act, 1961	Section 92C	Galactus Funware Technology (P.) Ltd. v. Deputy Commissioner of Income-tax	Click Here	No separate interest adjustment on overdue receivables is needed when working-capital adjustments are factored into comparables’ margins under Rule 10B under TNMM.
Income-tax Act, 1961	Section 148	Ratnalaya Jewellers v. Assistant/Deputy Commissioner of Income-tax	Click Here	Issuing a Section 148 reassessment notice using a duplicate PAN based on specific cash deposit info does not invalidate the notice if belief of income escapement was validly formed.
Income-tax Act, 1961	Section 199	HDFC Bank Ltd. v. Deputy Commissioner of Income-tax	Click Here	Short TDS/TCS credit granted at the processing stage must be reconciled with Form 26AS and balance credit allowed where scrutiny assessment shows no adverse findings.
Income-tax Act, 1961	Section 199	Karan Vahi v. Income-tax Officer	Click Here	Subsequent reduction of TDS by the deductor cannot be a ground to deny TDS credit to the assessee if the interest on enhanced compensation was taxed in that assessment year.
Income-tax Act, 1961	Section 250	HDFC Bank Ltd. v. Deputy Commissioner of Income-tax	Click Here	Ex-parte dismissal of an appeal without considering the subsequent scrutiny assessment order violates principles of natural justice; remanded to AO for fresh review.
Income-tax Act, 1961	Section 271C	Double Tree by Hilton Hotel v. Addl. CIT (TDS) Kanpur	Click Here	Failure to deduct TDS due to a bona fide belief and initial operational disruption (frequent staff changes) establishes reasonable cause, invalidating penalty under Section 271C.