INCOME TAX Case Law 04.07.2026

Relevant Act	Section / Authority	Case Law / Notification Title	Citation	Brief Summary
Income-tax Act, 1961	Section 10(46)	Notification No. 73/2026	Click Here	CBDT grants income tax exemption to Mussoorie Dehradun Development Authority (MDDA) on specified incomes (grants, leases, bank interest, etc.) retrospectively for AYs 2022-23 and 2023-24.
Income-tax Act, 1961	Section 80G(5)	Circular No. 06/2026	Click Here	CBDT condones the delay in filing Form No. 10AB for renewal of 80G approval where applications were submitted electronically between Oct 1, 2025, and Mar 31, 2026.
Income-tax Act, 1961	Section 2(14)	Mrs. Sherlyn Dias v. Income-tax Officer	Click Here	Consideration received under a Development Agreement for transferring development rights in immovable property is taxable under “Capital Gains”, not “Income from Other Sources”.
Income-tax Act, 1961	Section 2(15) & 13(1)(b)	Visa Dishawal Bania Caste Trust v. CIT (Exemptions)	Click Here	Cancellation of registration under section 13(1)(b) was held unsustainable for a trust established in 1910, as the provision does not apply to trusts created before the commencement of the 1961 Act.
Income-tax Act, 1961	Section 9(1)(v)	Barclays Bank PLC v. Additional CIT	Click Here	Interest received by a non-resident bank’s Indian branch from overseas placements is not taxable under section 9(1)(v)(c) unless it is established that the funds were used for business in India.
Income-tax Act, 1961	Section 9	Barclays Bank PLC v. Additional CIT	Click Here	Interest received by Indian branches of a UK bank from Nostro accounts or overseas Head Office branches represents self-payment and does not constitute taxable income.
Income-tax Act, 1961	Section 11 & 13	A.P. Vulnerability Reduction Fund Trust v. Assistant Director of IT	Click Here	Exemption under section 11 is allowable where interest income was spent on disaster mitigation equipment aligning with trust objects; no section 13 violation is triggered without proof of misuse.
Income-tax Act, 1961	Section 11(3)(d)	D.L. Shah Trust for Applied Science… v. Income-tax Officer	Click Here	Shifting accumulated section 11(2) funds to other section 12AA trusts under labels like “project charges” triggers section 11(3)(d) deemed income; nomenclature does not change the statutory restriction.
Income-tax Act, 1961	Section 14A	Barclays Bank PLC v. Additional CIT	Click Here	No section 14A disallowance is warranted if an assessee possesses interest-free funds far exceeding the investments that generated exempt income under section 10(15)(4A).
Income-tax Act, 1961	Section 14A	Barclays Bank PLC v. Additional CIT	Click Here	Section 14A expenditure disallowance cannot be applied to interest expenses related to FCNR(B) deposits if the corresponding interest income was fully taxed and never claimed as exempt.
Income-tax Act, 1961	Section 32	Deputy CIT v. Coca-Cola India (P.) Ltd.	Click Here	Assessee is entitled to depreciation on business assets (coolers) retained under its ownership and control even if they are structurally interlinked with bottlers’ operations.
Income-tax Act, 1961	Section 36(1)	Barclays Bank PLC v. Additional CIT	Click Here	A write-back of provisions for bad debts cannot be taxed again if the amount had already been subjected to tax in an earlier year; fact-checking is mandatory.
Income-tax Act, 1961	Section 37(1)	Barclays Bank PLC v. Additional CIT	Click Here	Interest paid to the RBI for a shortfall in maintaining mandatory CRR/SLR is compensatory in nature, does not constitute a statutory penalty under section 37(1), and is deductible.
Income-tax Act, 1961	Section 37(1)	Deputy CIT v. Coca-Cola India (P.) Ltd.	Click Here	Service charges paid for bottler plant quality audits cannot be disallowed if the expenditure has a direct business nexus and identical costs were allowed in preceding years.
Income-tax Act, 1961	Section 37(1)	Deputy CIT v. Coca-Cola India (P.) Ltd.	Click Here	Marketing and sales promotion expenses cannot be disallowed under section 37(1) merely because a third-party brand owner or bottler derives an incidental benefit.
Income-tax Act, 1961	Section 37(1)	Deputy CIT v. Coca-Cola India (P.) Ltd.	Click Here	Marketing support charges, rebates, and discounts given to bottlers to scale concentrate sales are legitimate, commercially expedient expenditures deductible under section 37.
Income-tax Act, 1961	Section 37(1)	Barclays Bank PLC v. Additional CIT	Click Here	Year-end revaluation losses on outstanding forex contracts calculated under FEDAI guidelines and consistent accounting practices are business losses, not speculative or contingent.
Income-tax Act, 1961	Section 37(1)	Barclays Bank PLC v. Additional CIT	Click Here	Club entrance and subscription fees paid by a company on behalf of its employees constitute allowable revenue business expenditure under section 37(1).
Income-tax Act, 1961	Section 37(1)	Barclays Bank PLC v. Additional CIT	Click Here	Broken period interest paid while purchasing securities as stock-in-trade to fulfill statutory SLR requirements is deductible as revenue expenditure.
Income-tax Act, 1961	Section 68	Anil Madaan v. Income-tax Officer	Click Here	For an unorganized footwear business, entire demonetization cash deposits cannot be treated as unexplained cash credit; an ad-hoc lumpsum addition of ₹2 lakhs was deemed sufficient.
Income-tax Act, 1961	Section 69	Income-tax Officer v. Priya Barbana Farrokh Irani	Click Here	Residential property investments backed by a complete banking money trail showing remittances from a non-resident husband cannot be treated as unexplained investments under section 69.
Income-tax Act, 1961	Section 80-IB & 80-IA	J. Creations v. Assistant CIT	Click Here	Deductions claimed under Heading ‘C’ (like 80-IB) must be reduced by amounts allowed under section 80-IA to ensure total deductions do not exceed eligible business profits.
Income-tax Act, 1961	Section 92C	Deputy CIT v. Coca-Cola India (P.) Ltd.	Click Here	A Transfer Pricing Officer’s (TPO) adjustment on AMP (Advertising, Marketing, and Promotion) expenses without applying any legally recognized method to determine the ALP is invalid.
Income-tax Act, 1961	Section 115BBE	Anil Madaan v. Income-tax Officer	Click Here	The amended rigorous provisions of section 115BBE apply only to transactions on or after April 1, 2017; prior demonetization deposits must be evaluated under normal tax rates.
Income-tax Act, 1961	Section 143(2) & 147	Global Cricket Corporation Pte. Ltd. v. Additional Director of IT	Click Here	Reopening an assessment under section 147 and issuing a draft order under section 144C(1) without serving the mandatory section 143(2) notice invalidates the entire jurisdiction.
Income-tax Act, 1961	Section 144C	Global Cricket Corporation Pte. Ltd. v. Additional Director of IT	Click Here	Issuing demand notices (u/s 156) and initiating penalty proceedings alongside a draft assessment order invalidates it, as the AO effectively passed a final order in the guise of a draft.
Income-tax Act, 1961	Section 151 & 148	Vishesh Developers (P.) Ltd. v. Assistant CIT	Click Here	A section 148 notice issued beyond 3 years from the end of the AY is invalid if the statutory approval was obtained from the Principal Commissioner instead of the specified authority u/s 151.
Income-tax Act, 1961	Section 234B & 234D	Barclays Bank PLC v. Additional CIT	Click Here	Section 234B interest cannot be levied by treating a processed refund as a shortfall in advance tax, as such recovery falls exclusively under section 234D (which wasn’t active then).
Income-tax Act, 1961	Section 264	Bhikhabhai Maneklal Patel v. Office of Principal CIT	Click Here	Rejecting a section 264 revision application mechanically without granting an explicitly requested personal hearing violates natural justice; the matter must be remanded.