Category Archives: Income Tax

Disallowance under Section 36(1)(iii) must reflect actual interest paid, while verified loans defeat Section 68 additions.

By | June 24, 2026
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Disallowance under Section 36(1)(iii) must reflect actual interest paid, while verified loans defeat Section 68 additions. Issue Whether the lower authorities were justified in making a massive interest disallowance under Section 36(1)(iii) without correlating the disallowance to the actual interest expenditure incurred on loans diverted for interest-free advances. Whether an addition under Section 68 for… Read More »

DSIR-certified R&D qualifies for weighted deduction, and uncertified capital expenditure is allowed as normal deduction.

By | June 24, 2026
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DSIR-certified R&D qualifies for weighted deduction, and uncertified capital expenditure is allowed as normal deduction. Issue Whether the Assessing Officer is required to grant the full 200% weighted deduction under Section 35(2AB) on the capital R&D expenditure certified by the DSIR in Form 3CL, rather than limiting it to 100%. Whether scientific research capital expenditure… Read More »

Assessing Officer directed to exclude Mutual Funds and Tax Free Bonds from Section 14A calculations.

By | June 24, 2026
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Assessing Officer directed to exclude Mutual Funds and Tax Free Bonds from Section 14A calculations. Issue Whether the Assessing Officer, while computing the indirect expense disallowance under Section 14A read with Rule 8D(2)(ii), must exclude investments made in Mutual Funds and Tax Free Bonds from the average value of investments. Whether any further disallowance can… Read More »

CIT(E) cannot reject trust registration renewal over past amendments; matters remanded for verification.

By | June 24, 2026
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CIT(E) cannot reject trust registration renewal over past amendments; matters remanded for verification. Issue Whether the CIT(E) is justified in rejecting a trust’s Section 12A registration renewal application based on non-registration under a State Trust Act, historical object amendments, and financial advances when these details were already on record during its previous 2021 re-registration. Whether… Read More »

DTAA Rates Do Not Apply to Dividend Distribution Tax, and Discount on ESOP is Allowed as Business Expenditure

By | June 24, 2026
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DTAA Rates Do Not Apply to Dividend Distribution Tax, and Discount on ESOP is Allowed as Business Expenditure Issue Whether Double Taxation Avoidance Agreement (DTAA) provisions are triggered when a domestic company pays Dividend Distribution Tax (DDT) under Section 115-O, thereby allowing a refund of DDT paid in excess of DTAA rates. Whether the discount… Read More »

INCOME TAX CASE LAW 20.06.2026

By | June 23, 2026
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INCOME TAX CASE LAW 20.06.2026 INCOME TAX CASE LAW 20.06.2026 Relevant Act Section Case Law Title Brief Summary Citation Income Tax Act, 1961 Sec. 14A Cadila Pharmaceuticals Ltd. v. DCIT Disallowance under Section 14A read with Rule 8D cannot exceed the actual exempt income earned during the year; notional expenditure cannot be taxed. Click Here… Read More »

Final Assessment Order Passed in the Name of an Amalgamated, Non-Existent Entity is Void

By | June 23, 2026
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Final Assessment Order Passed in the Name of an Amalgamated, Non-Existent Entity is Void Issue Whether DRP directions and a final assessment order passed under Section 143(3) read with Sections 144C(13) and 144B in the name of an erstwhile amalgamated company are valid, when the fact of amalgamation and subsequent name change had already been… Read More »

Assessee Entitled to Interest on Delayed Release of Seized Certificates Plus Interest on Interest

By | June 23, 2026
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Assessee Entitled to Interest on Delayed Release of Seized Certificates Plus Interest on Interest Assessee Entitled to Interest on Delayed Release of Seized Certificates Plus Interest on Interest Issue Whether an assessee is entitled to interest on the maturity value of Kisan Vikas Patras (KVPs) and Indira Vikas Patras (IVPs) for the period they were… Read More »

Downward Profit Adjustments Unsustainable Without Material Proof and Financially Distressed Comparables Must Be Excluded

By | June 23, 2026
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Downward Profit Adjustments Unsustainable Without Material Proof and Financially Distressed Comparables Must Be Excluded Downward Profit Adjustments Unsustainable Without Material Proof and Financially Distressed Comparables Must Be Excluded Issue Whether a profit adjustment under Section 80-IA(10) can be sustained if the Transfer Pricing Officer (TPO) fails to provide material evidence proving a close connection, an… Read More »

Rebate Under Section 87A Cannot Be Denied on Section 112 Capital Gains for Assessment Year 2024-25

By | June 23, 2026
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Rebate Under Section 87A Cannot Be Denied on Section 112 Capital Gains for Assessment Year 2024-25 Issue Whether a resident individual opting for the new tax regime under Section 115BAC is eligible to claim a tax rebate under Section 87A against long-term capital gains taxable under Section 112, provided their total income does not exceed… Read More »