IMPORTANT INCOME TAX CASE LAWS 09.10.2025 Section Case Law Title Brief Summary Citation Relevant Act 56(2)(x)(b) Javidbhai Ahemadbhai Mansuri vs. Income-tax Officer ITAT quashed addition under Section 56(2)(x)(b) for difference between property’s purchase price and stamp duty value because the agreement and part payment were made in 2013, before the section came into force.… Read More »
A delay in the online “verification” of an audit report in Form 10BB is a condonable procedural lapse, especially when the report was uploaded on time and the delay was due to a professional’s oversight. Issue Should a delay in the final online “verification” step of filing an audit report in Form 10BB be condoned,… Read More »
Additional evidence cannot be used to contradict an income already declared in a return. Issue Can a taxpayer, who has already voluntarily declared a sum of seized cash as their “income from other sources” in their filed income tax return, be allowed to introduce new and additional evidence at a late appellate stage to try… Read More »
An ad hoc disallowance for alleged bogus creditors is invalid if the taxpayer provides complete supporting evidence to prove the genuineness of the transactions. Issue Can an Assessing Officer make a substantial ad hoc disallowance for alleged bogus creditors if the taxpayer provides comprehensive documentary evidence, including invoices, bank statements, and TDS records, to prove… Read More »
A case was remanded to allow the AO to examine new evidence on sundry creditors. Issue What is the appropriate course of action for an appellate authority when a taxpayer, whose entire balance of sundry creditors has been added back to their income due to non-submission of evidence, seeks to introduce voluminous new documentary evidence… Read More »
The requirement to maintain books of account under Section 44AA of the Income-tax Act, 1961, does not apply to a “Local Authority” that is not engaged in a regular business or profession. Issue Can a penalty be legally levied under Section 271A of the Income-tax Act, 1961, on a “Local Authority” for an alleged failure… Read More »
An addition under Section 68 of the Income-tax Act, 1961, is invalid if the assessee successfully proves the identity, creditworthiness, and genuineness of the transaction with documentary evidence. Issue Can an Assessing Officer (AO) make an addition for an unexplained cash credit under Section 68 if the taxpayer has provided a complete and comprehensive set… Read More »
An investor company’s creditworthiness is proven by its balance sheet and net worth, not just by its income for a particular year. Issue Can the creditworthiness of a corporate investor be rejected and a share capital transaction be treated as bogus under Section 68 of the Income-tax Act, 1961, simply because the investor company has… Read More »
A case was remanded for a fresh decision to allow the Assessing Officer to examine crucial additional evidence that was filed late by the taxpayer. Issue Should an appellate authority, like the Income Tax Appellate Tribunal, admit additional evidence that is filed for the first time at a late stage of the proceedings, if that… Read More »
An addition cannot be made on the closing balance of assets without any fresh investment. Issue Can an Assessing Officer (AO) make an addition for unexplained investments or unexplained loans by simply treating the entire closing balance of such assets at the end of the year as unexplained, without bringing any evidence on record to… Read More »