IMPORTANT INCOME TAX CASE LAWS 30.12.2025

Relevant Act	Section	Case Law Title	Brief Summary	Citation
Income-tax Act, 1961	Section 10AA	Cummins India Ltd. v. ACIT	Denial of SEZ deduction was unjustified where the return was filed with a marginal delay due to portal glitches, but the audit report was filed on time.	Click Here
Income-tax Act, 1961	Section 14A	ACIT v. City Union Bank Ltd.	A writ petition challenging a Section 148 notice is not maintainable if the assessee participated in proceedings and the AO disposed of objections via a speaking order which was not assailed.	Click Here
Income-tax Act, 1961	Section 14A	Cummins India Ltd. v. ACIT	Disallowance of 1% of exempt income was sustained where the AO recorded dissatisfaction with the assessee’s suo motu disallowance, citing the involvement of senior management in investment decisions.	Click Here
Income-tax Act, 1961	Section 24(b) / 80C	Vinayak Hanumantrao Ghorpade v. Vaishnavi Satish Bankar	Deductions for housing loan interest and principal repayment were disallowed as the assessee failed to produce the loan sanction letter or interest certificate.	Click Here
Income-tax Act, 1961	Section 35	Cummins India Ltd. v. ACIT	Issue of weighted deduction on R&D was remanded for verification where Form 3CL was not available during assessment but was furnished subsequently.	Click Here
Income-tax Act, 1961	Section 37(1)	Dindayal Magasvargiya Sahakari Soot Girni Ltd. v. ACIT	Interest on a State Government loan, provided for in the books under the mercantile system, is an ascertained liability and allowable under Section 37.	Click Here
Income-tax Act, 1961	Section 37(1)	Scientific Games India (P.) Ltd. v. DCIT	Principal portion of lease rentals for vehicles taken on finance lease (where assessee is not the owner) is allowable as revenue expenditure.	Click Here
Income-tax Act, 1961	Section 43B	Vinayak Hanumantrao Ghorpade v. Vaishnavi Satish Bankar	AO directed to verify if GST payable was actually paid before filing the return of income; if so, it is an allowable deduction under Section 43B.	Click Here
Income-tax Act, 1961	Section 44AA / 271A	Vallabhbhai Bhagvanjibhai Kathiriya Khitadia v. ITO	An assessee eligible for presumptive taxation under Section 44AD is not required to maintain books under Section 44AA; thus, no penalty under Section 271A can be imposed.	Click Here
Income-tax Act, 1961	Section 48	ITO v. Godrej Agrovet Ltd.	AO directed to verify capital gains tax remittance to non-residents by applying the TDS rate of 11.54% (per Section 112(1)(c)(iii)), noting that Section 48 provisos relate to computation, not the tax rate.	Click Here
Income-tax Act, 1961	Section 56(2)	Raghavendra Ramakrishna Naik v. ITO	An allotment letter fixing consideration and payment schedule constitutes a valid agreement for the proviso to Section 56(2)(vii)(b); difference between agreement value and stamp duty value is not taxable.	Click Here
Income-tax Act, 1961	Section 56(2)(viib)	Asirvad Micro Finance Ltd. v. ACIT	Section 56(2)(viib) (Angel Tax) is not applicable to a company that became a deemed public limited company (Section 2(18)) upon acquisition by a public company.	Click Here
Income-tax Act, 1961	Section 68	Vinayak Hanumantrao Ghorpade v. Vaishnavi Satish Bankar	Addition for unsecured loans was remanded for de novo adjudication as the assessee claimed the loans were repaid in subsequent years, requiring verification.	Click Here
Income-tax Act, 1961	Section 69A / 148	Vallabhbhai Bhagvanjibhai Kathiriya Khitadia v. ITO	Assessment based on a Section 148 notice issued after 01-04-2021 (for AY 2015-16), which should have been issued by 31-03-2019, was held invalid and quashed.	Click Here
Income-tax Act, 1961	Section 80P	Sikkim State Cooperative Supply and Marketing Federation Ltd. v. DCIT	Interest income earned by a cooperative society from investments with cooperative banks registered under the Sikkim Co-operative Societies Act is eligible for deduction under Section 80P(2)(d).	Click Here
Income-tax Act, 1961	Section 92C	Scientific Games India (P.) Ltd. v. DCIT	TPO’s recharacterization of a captive software development service provider as a “contract R&D service provider” was unsustainable given consistent acceptance in earlier years and a BAPA with CBDT.	Click Here
Income-tax Act, 1961	Section 92C	Cummins India Ltd. v. ACIT	Separate benchmarking of royalty was unsustainable where the assessee benchmarked it under TNMM as part of its manufacturing activity.	Click Here
Income-tax Act, 1961	Section 115JB	Cummins India Ltd. v. ACIT	Disallowance relating to exempt income made under normal provisions cannot be added back when computing book profits under Section 115JB.	Click Here
Income-tax Act, 1961	Section 127	Alta Vista Info Solutions (P.) Ltd. v. PCIT	SLP dismissed; transfer of jurisdiction from New Delhi to Faridabad was upheld where a common director involved in a search had signed returns for the companies, establishing a nexus for coordinated investigation.	Click Here
Income-tax Act, 1961	Section 132B	Rajesh Gupta v. ACIT	The 120-day period in the proviso to Section 132B(1)(i) is not mandatory. High Court cannot direct the release of seized assets under Article 226 when the AO is seized of the matter.	Click Here
Income-tax Act, 1961	Section 153	NetCracker Technology Solutions (India) (P.) Ltd. v. DCIT	Final assessment order passed beyond the extended time limit prescribed under Section 153(4) (following DRP directions) was barred by limitation and liable to be quashed.	Click Here
Income-tax Act, 1961	Section 270A	Ajay Pal Singh v. ITO	No penalty for under-reporting where a salaried employee revised his return to claim VRS exemption under a bona fide belief; there was no intention to misreport.	Click Here

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