IMPORTANT INCOME TAX CASE LAWS 19.02.2026

Section	Case Law Title	Core Ruling & Strategic Summary	Citation
S. 148 / 151A	Vibhavari B. Bhatt v. ITO	[Landmark – Faceless Mandate] Reassessment notices issued after 29-3-2022 by a Jurisdictional AO (manual) instead of the Faceless AO are void. High Court rulings (e.g., Hexaware Tech) are binding on the DRP.	Click Here
S. 32	Edgeverve Systems Ltd. v. ACIT	[Intangibles Depreciation] Trademarks, technology, and goodwill acquired via separate Business Transfer Agreements qualify for depreciation. Since it wasn’t a “succession of business as a whole,” S. 170 limits don’t apply.	Click Here
S. 145 / S. 5	Pact Securities & Fin. Services v. DCIT	[Accrual of Interest] Accrued interest on NPAs is taxable if the lender extends fresh credit to the same borrower. This conduct proves interest is “real income” regardless of RBI Prudential Norms.	Click Here
S. 37(1)	ITO v. Rajeev Kumar Kapoor	[Interest on TDS] Interest paid for late deposit of TDS is compensatory, not penal. It is allowable as business expenditure and does not fall under the S. 37(1) disallowance for “offences.”	Click Here
S. 10(26)	Laltanpuia Chawghlut v. ITO	[Tribal Status Limit] Tribal status/residence alone does not exempt cash deposits. The taxpayer must prove the income arose from a legitimate business within the specified tribal area.	Click Here
S. 2(15)	CIT(E) v. Jaipur Dev. Authority	Incidental surplus in GPU (General Public Utility) activities doesn’t disqualify a trust u/s 11, provided the 20% quantitative limit on commercial receipts is maintained.	Click Here
S. 69C	ITO v. Rajeev Kumar Kapoor	Purchases aren’t “bogus” solely because the supplier didn’t file ITR or respond to notices, provided the assessee has full stock records and the supplier is GST-registered.	Click Here
S. 37(1)	Nomura Capital (India) v. DCIT	Unrealized losses on fair valuation of Benchmark Linked Debentures are allowable expenses, as they represent a known liability on the balance sheet date.	Click Here
S. 222 / 281	Sree Gokulam Chit & Finance v. TRO	[Recovery Shield] A Tax Recovery Officer (TRO) can recover arrears but has no jurisdiction to declare a mortgage in favor of a third party “void ab initio.” That requires a civil suit.	Click Here

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