Section 14A does not apply to non-income receipts governed by the doctrine of mutuality. Issue Whether Section 14A of the Income-tax Act, 1961 applies to interest receipts from head office/overseas branches that fall outside the definition of ‘income’ under Sections 2(24) and 4 due to the doctrine of mutuality. Facts The assessee, a foreign bank… Read More »
Where Section 11(6) bars depreciation, capital expenditure applies as income, but pre-operative expenses cannot be deferred. Issue Whether an assessee-trust disallowed from claiming depreciation under Section 11(6) is entitled to claim the actual capital expenditure incurred during the year as application of income under Section 11. Whether charitable organizations can defer pre-operative expenditure to be… Read More »
Provisional registration benefits apply only during pending assessments, but unregistered entities can deduct business expenses. Issue Whether the benefit of the second proviso to Section 12A(2) extends to prior assessment years when provisional registration is granted after summary processing under Section 143(1) without active assessment proceedings pending before the Assessing Officer. Whether an entity denied… Read More »
Accumulation under Section 11(2) is permissible for specific revenue purposes aligned with trust objects. Issue Whether accumulation of income under Section 11(2) of the Income-tax Act, 1961 is restricted only to capital expenditure/long-term projects, or if it can also be allowed for specific revenue purposes that align with the objects of the trust. Facts The… Read More »
NRI desk costs fall under Section 44C while Section 36(1)(viia) deduction precedes Section 44C computation. Issue Whether overseas branch expenses incurred for operating NRI desks soliciting deposits constitute ‘head office expenditure’ under Section 44C or are allowable as separate business expenses under Section 37(1). Whether data processing charges and overseas branch expenses attributable to Indian… Read More »
Notional interest, clerical reporting errors, and substantiated trade payables cannot be taxed as income. Issue Whether notional interest calculated on interest-free business advances can be brought to tax under Section 4 of the Income-tax Act in the absence of a contractual clause or evidence of actual accrual/receipt. Whether an addition to income can be made… Read More »
Unchallenged Settlement Deed and duly proved registered Will negate partition claim through alleged benami transaction. Issue Whether a suit for partition claiming property rights through an alleged benami purchase is maintainable when the absolute title under an unchallenged Settlement Deed and the execution of a registered Will are duly proved. Facts The appellant, daughter of… Read More »
RWA activities confined to members follow doctrine of mutuality and lack public charity under Section 12AB. RWA activities confined to members follow doctrine of mutuality and lack public charity under Section 12AB. Issue Whether a Residents Welfare Association providing maintenance and facility services exclusively to its members operates under the doctrine of mutuality, thereby lacking… Read More »
INCOME TAX CASE LAWS 31.07.2026 Relevant Act Section Case Law Title Brief Summary Citation Prevention of Money Laundering Act, 2002 Section 2 Cochin Minerals and Rutile Ltd. v. Directorate of Enforcement Proceeds of crime investigation and attachment actions under PMLA can start without an FIR/complaint for the scheduled offence; existence of an FIR is not… Read More »
Mere delayed payment of tax without evidence of wilful attempt to evade cannot attract prosecution. Issue Whether the mere delayed payment of assessed tax, in the absence of circumstances evidencing a wilful attempt to evade, constitutes an offence under Section 276C(2) when read with the presumption of culpable mental state under Section 278E, and whether… Read More »