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Taxability of Pension Introduction Pension income is taxable under “Salaries.” While an uncommuted pension (paid periodically) is fully taxable, a commuted pension (lump sum) enjoys exemptions under specific conditions. Taxability of Pension Uncommuted Pension: Monthly pensions are taxable as “Salary.” Family pensions are taxable as “Income from Other Sources,” with a deduction of the lower… Read More »

Suo Motu Adjustment of Erroneously Paid Tax: Limitation and Penalties Set Aside Facts The Audit Instruction: The assessee, a nationalized bank, was directed by an audit team to pay service tax on its share of profit from foreign exchange transactions. The Payment: Following these instructions, the bank paid the tax but later realized, upon internal… Read More »

Important Income Tax Case Laws 29.04.2026 Relevant Act Section Case Law Title Citation Brief Summary Income Tax Sec 2(1A) Bombay Super Hybrid Seeds Ltd. v. DCIT/ACIT Click Here Seed Production: Income from hybrid seeds produced on leased land under company supervision is “Agricultural Income,” not business income. Income Tax Sec 2(22)(e) Ashwinikumar Ramkumar Poddar v.… Read More »

TDS on Immovable Property: Liability Arises on Total Consideration, Regardless of Payment Status Facts The Transaction: During AY 2018-19, the assessee purchased land for a total consideration of ₹4.81 crores. The Default: The assessee deducted TDS (under Section 194-IA) at 1% only on ₹1.43 crores, leaving a balance of ₹3.38 crores without tax deduction. Assessee’s… Read More »

Merger of Original Assessment into Search Assessment: Original Disallowances Become Inoperative Facts Original Assessment: For AY 2006-07, an assessment was completed under Section 143(3), where the Assessing Officer (AO) disallowed a claim for short-term capital loss. Search Proceedings: Subsequently, a search was conducted on the assessee’s premises, triggering the block assessment regime under Section 153A.… Read More »

Benchmarking Interest on AE Loans: Consistency and Credit for Suo Motu Income Facts The Transaction: The assessee, a power generation company, advanced loans to its Associated Enterprise (AE). Assessee’s Benchmarking: The company offered interest income based on LIBOR plus a spread, which it reported suo motu in its return of income. The Dispute: The Transfer… Read More »

Rejection of Books Prior to DVO Reference: Validity of Section 69B Addition Facts The Dispute: The Assessing Officer (AO) made an addition to the assessee’s income under Section 69B representing the difference between the cost of construction reported by the assessee and the valuation estimated by the District Valuation Officer (DVO). Assessee’s Challenge: The assessee… Read More »