IMPORTANT INCOME TAX CASE LAWS 03.01.2026

Relevant Act	Section	Case Law Title	Brief Summary	Citation
Income-tax Act, 1961	Section 4	Vishnu Trimbak Thakur v. PCIT-1	Self-assessment tax paid on undisclosed income under the Income Declaration Scheme (IDS), 2016 (which was deemed rejected) is “inextricably linked” to that income. Credit for such tax must be given upon the revival of the declaration.	Click Here
PBPT Act, 1988	Section 24	Shyamsundar Sharma v. ACIT/Initiating Officer	SCN under the Benami Act based on Excel sheets recovered during a tax search and statements of beneficial owners was valid. The Initiating Officer had sufficient “reason to believe” that the assessee was a benamidar.	Click Here
Income-tax Act, 1961	Section 28(i)	Aamir Khatri v. DCIT	DEPB income is intrinsically linked to export activity and constitutes operating income. It cannot be segregated from the export business for computing gross profit.	Click Here
Income-tax Act, 1961	Section 35(2AB)	Applied Research International (P.) Ltd. v. Secretary DSIR	Where R&D approval was granted for AY 2017-18, the refusal for AYs 2015-16 and 2016-17 was remanded for fresh examination as there was no ‘in principle’ impediment to granting approval for the earlier years.	Click Here
Income-tax Act, 1961	Section 37(1)	DCIT v. Ace Infracity Developers (P.) Ltd.	Double addition is impermissible. If the assessee has already added back items (interest on delayed TDS, CSR exp, loss on asset sale) in the computation, the AO cannot disallow them again.	Click Here
Income-tax Act, 1961	Section 37(1)	Timex Group India Ltd. v. Addl. CIT	Ad-hoc disallowance of miscellaneous expenditure (meetings, AGM, etc.) is unwarranted when bills, invoices, and vouchers are furnished.	Click Here
Income-tax Act, 1961	Section 40(a)(i)	Timex Group India Ltd. v. Addl. CIT	Disallowance for non-deduction of TDS (paid to non-residents) upheld where the assessee claimed a Tax Auditor error but failed to provide any rectification letter or material evidence to substantiate the claim.	Click Here
Income-tax Act, 1961	Section 43B	Keysight Technologies India (P.) Ltd. v. DCIT	Customs duty paid under protest and later refunded (and offered to tax) cannot be disallowed under Section 43B in the year of payment, as it would lead to double taxation.	Click Here
Income-tax Act, 1961	Section 68	DCIT v. Ace Infracity Developers (P.) Ltd.	Addition under Section 68 for a loan transaction was deleted where the genuineness and creditworthiness of the same lender (‘H’) had already been established in an earlier assessment year on identical facts.	Click Here
Income-tax Act, 1961	Section 68	SGA Infotech (P.) Ltd. v. ACIT	Reassessment order quashed where notice under Section 148 was issued on 1-4-2021 but proceedings were conducted under the old provisions (pre-2021 amendment).	Click Here
Income-tax Act, 1961	Section 69	Aravindan Rengasamy v. ACIT (International Taxation)	Addition based on Form 61B (SFT) data for securities transactions was remanded. The assessee claimed the reported figures were “gross” and already included in NSDL/bank records, requiring factual verification.	Click Here
Income-tax Act, 1961	Section 69A	DCIT v. Ace Infracity Developers (P.) Ltd.	Cash-in-hand recorded in regular books cannot be treated as unexplained merely because physical cash was not found during a search. The recording in books (acknowledged by AO) is sufficient explanation.	Click Here
Income-tax Act, 1961	Section 69C	RG Home Furnishing (P.) Ltd. v. DCIT	Addition for bogus purchases in a Section 153A assessment was deleted as it was based on “dumb documents” (blank letterheads) found during search, without any corroborative evidence.	Click Here
Income-tax Act, 1961	Section 80P	Saunshi Urban Co-op Credit Society Ltd. v. ITO	Interest from investments made due to statutory compulsion (Karnataka Co-op Societies Act) qualifies for Section 80P deduction. Even without a banking license, interest from Co-op Banks is eligible under Section 80P(2)(d).	Click Here
Income-tax Act, 1961	Section 132B	Sanghvi Dhanrupji Devaji & Co v. Union of India	Application for release of seized jewellery (stock-in-trade) must be decided by the Jurisdictional AO. Rejection by a non-jurisdictional officer is invalid.	Click Here
Income-tax Act, 1961	Section 145	Timex Group India Ltd. v. Addl. CIT	No addition can be made for differences in turnover between ITR and Tax Audit Report (TAR) if the difference is solely due to rounding off figures.	Click Here
Income-tax Act, 1961	Section 147	Vivaansh Edutech (P.) Ltd. v. ACIT	Reopening based solely on a Suspicious Transaction Report (STR) alleging circuitous transactions was quashed. The AO failed to doubt the documentary evidence or point out infirmities in the assessee’s full disclosure.	Click Here
Income-tax Act, 1961	Section 148	Smt. Sushila Gupta v. Union of India	Notice issued in the name of a deceased assessee (despite Revenue being informed) is invalid. The assessment must be set aside, though fresh proceedings against legal representatives are permissible.	Click Here
Income-tax Act, 1961	Section 149	Dharmadev Developers v. Income-tax Department	Notice under Section 148 dated 31-7-2022 for AY 2013-14 was invalid as it was issued beyond the surviving time limit prescribed under the new reassessment scheme.	Click Here

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