IMPORTANT INCOME TAX CASE LAWS 18.11.2025
| Section | Case Law Title | Brief Summary | Citation | Relevant Act |
| Section 2(9) | Deputy Commissioner of Income-tax (BPU) v. Jitendra Rameshbhai Patel | Proprietor deposited cash and transferred it to a company, claiming a gold sale. The arrangement was found to project unaccounted money as legitimate (proprietor admitted handling cash for commission without a real transaction), constituting a benami transaction under section 2(9)(A). | Click Here | Prohibition of Benami Property Transactions Act, 1988 |
| Section 37(1) | Nuvama Wealth Management Ltd. v. Deputy Commissioner of Income-tax | Where the AO initially allowed the deduction for ESOP cost (issued by the holding company), the PCIT’s action under section 263 was unsustainable because the records showed the receipts from the holding company were for TDS funding (not ESOP cost recovery), making the invocation of section 263 unwarranted. | Click Here | Income-tax Act, 1961 |
| Section 41(1) | Foster Wheeler (G.B.) Ltd. v. DCIT, International Taxation – Circle-1(1) | Reversal of a provision for liquidated damages that was not allowed as a deduction in earlier years (and where the dispute was settled under the VSV Scheme, 2024) could not be taxed under section 41(1) in the current year. | Click Here | Income-tax Act, 1961 |
| Section 56 (First Case) | ACIT, Central Circle v. Sanghvi Beauty and Technologies (P.) Ltd. | Addition under section 56(2)(viib) was made on account of share premium. Since the assessee furnished documents showing the source of investment and that shares were issued at Fair Market Value determined by a registered valuer using the DCF method, the matter was restored to the CIT(A) for fresh adjudication. | Click Here | Income-tax Act, 1961 |
| Section 56 (Second Case) | Assistant Commissioner of Income-tax v. Mytrah Vayu (Gujarat) (P.) Ltd. | Where the addition under section 56(2)(viib) for excess share premium was made on a protective basis, and the Tribunal deleted the substantive addition on merits in the subsequent year (when the shares were actually issued), the protective addition was not sustainable. | Click Here | Income-tax Act, 1961 |
| Section 68 | Principal Commissioner of Income-tax v. Jealous Commercial (P.) Ltd. | Addition under section 68 (unexplained cash credits) for substantial share application money and share premium was not justified, as the company furnished all requisite documents proving the identity and source of funds of the shareholders, despite the non-appearance of the directors before the AO. | Click Here | Income-tax Act, 1961 |
| Section 80G | Swami Samarth Adhyatmik Sanshodhan Sanstha v. Commissioner of Income-tax (Exemptions) | Assessee trust was engaged mainly in charitable activities, with limited religious activities not for the benefit of any particular religion. The conclusion that its objects were predominantly religious was unwarranted, and the assessee was entitled to approval under section 80G. | Click Here | Income-tax Act, 1961 |
| Section 92BA | Assistant Commissioner of Income-tax v. Mytrah Vayu (Gujarat) (P.) Ltd. | Reimbursement of project expenses by a wind energy SPV to its sponsor AE (capitalized to CWIP and not charged to P&L) did not qualify as a Specified Domestic Transaction (SDT) under section 80IA(10), hence there was no basis for benchmarking or making a Transfer Pricing (TP) adjustment. | Click Here | Income-tax Act, 1961 |
| Section 115BAB | GFCL EV Products Ltd. v. ACIT | Where the assessee exercised the option under section 115BAB in a prior year, the denial of the concessional tax rate by the CPC in the subsequent year’s processing under section 143(1) was contrary to law, as continued application of the section does not require a fresh form and such debatable factual issues cannot be adjusted under section 143(1). | Click Here | Income-tax Act, 1961 |
| Section 153C | Bhawna Garg v. Deputy Commissioner of Income-tax, Central | Incriminating material relating to the assessee was found in a search on ‘H’ Group. Since the relevant Assessment Year 2021-22 fell within six years prior to the search, an assessment required a notice under section 153C. In the absence of this notice, the assessment under section 143(3) was without jurisdiction. | Click Here | Income-tax Act, 1961 |
| Section 158BB (First Case) | Mange Ram Mittal v. Commissioner of Income-tax | SLP dismissed: An assessment order under section 158BC is required to be made based on both the result of the search and post-search enquiry and other consequential proceedings. | Click Here | Income-tax Act, 1961 |
| Section 158BB (Second Case) | Mange Ram Mittal v. Commissioner of Income-tax | SLP dismissed: Where incriminating material (unaccounted sales from liquor vends) was found, and salesmen stated the assessee was the real owner, the inference that undisclosed income was earned by the assessee through ghost/benami companies was valid. | Click Here | Income-tax Act, 1961 |
| Section 245 | Rajneesh Agarwal v. Income-tax Officer | The department had no scope to hold on to a refund amount where it could not demonstrate that any amount was payable or due from the assessee, and there was no specific statutory provision sanctioning the recovery of the tax. | Click Here | Income-tax Act, 1961 |
| Section 275 | Maharashtra State Electricity Transmission Company Ltd. v. Assessment Unit | Under the pre-1 April 2025 Section 275, a penalty order under section 271(1)(c) could not be passed while an appeal against the quantum assessment was pending before the Tribunal, leading to ad-interim relief restraining the revenue from acting on the penalty order. | Click Here | Income-tax Act, 1961 |
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