INCOME TAX CASE LAW 23.05.2026
| Relevant Act | Section | Case Law Title | Citation | Brief Summary |
| Income-Tax Act, 1961 | Sec. 2(14) | Keshavareddy Krishnareddy v. ACIT | Click Here | Compensation received from compulsory acquisition of agricultural land is not taxable under capital gains as agricultural lands are explicitly excluded from the definition of a capital asset under Sec. 2(14). |
| Income-Tax Act, 1961 | Sec. 2(15) | An-Nauman Educational Religious Social Charitable and Welfare Trust v. CIT (Exemptions) | Click Here | Setting up educational institutions, teaching Arabic, and imparting Islamic tenets without rituals or active propagation does not make a trust “religious.” It qualifies as a public charitable trust eligible for Sec. 12AB registration and Sec. 80G approval. |
| Income-Tax Act, 1961 | Sec. 28(i) | Keshavareddy Krishnareddy v. ACIT | Click Here | Sale of 25 plots held for 6 years by a restaurant owner cannot be treated as an “adventure in the nature of trade” merely due to basic land levelling. Absent systematic development or marketing, gains are Capital Gains, not Business Income. |
| Income-Tax Act, 1961 | Sec. 28(i) | Sterling Holiday Resorts (India) Ltd. v. ACIT | Click Here | For a 99-year time-share membership scheme, deferring a portion of the fee as advance subscription for future service obligations is justified under the matching principle and is fully recognized for tax purposes. |
| Income-Tax Act, 1961 | Sec. 44AD | Kempaiah Kemparaju v. DCIT | Click Here | Where a civil contractor routes all receipts through banking channels and declares a net profit of 6.06% (higher than the 6% presumptive rate), the AO cannot arbitrarily estimate net profit at 15%. Recomputation was directed at 7%. |
| Income-Tax Act, 1961 | Sec. 69A | Geora Agriculture Co-Operative Service Society Ltd. v. ITO | Click Here | Reassessment proceedings are vitiated for non-application of mind and lack of jurisdiction if the AO issues orders using an obsolete PAN despite the assessee pointing out the correct PAN during Sec. 148A proceedings. |
| Income-Tax Act, 1961 | Sec. 69A | Geora Agriculture Co-Operative Service Society Ltd. v. ITO | Click Here | Unexplained cash deposit additions are unsustainable if they match recorded business books that the Revenue failed to rebut. Books cannot be rejected simply due to non-audit under Sec. 44AB if the turnover is below the limits. |
| Income-Tax Act, 1961 | Sec. 69A | Geora Agriculture Co-Operative Service Society Ltd. v. ITO | Click Here | FDR investments sourced from renewals of older deposits and recorded receipts cannot be added as unexplained money. Doing so while also taxing the source cash deposits amounts to impermissible double addition. |
| Income-Tax Act, 1961 | Sec. 80C & 80TTA | Kempaiah Kemparaju v. DCIT | Click Here | If an assessee fails to submit supporting evidence for Sec. 80C/80TTA deductions or TDS/self-assessment tax credits during assessment, the matter can be remitted back to the AO for verification of documentation. |
| Income-Tax Act, 1961 | Sec. 154 | Gail (India) Ltd. v. ACIT | Click Here | The Vivad se Vishwas (DTVSV) Act, 2020 does not confer rectification powers. Under Sec. 5(3), determinations under the scheme are final, meaning an AO cannot issue a Sec. 154 rectification order based on audit objections. |
| Income-Tax Act, 1961 | Sec. 156 | H L Buildwell (P.) Ltd. v. DCIT, Central | Click Here | Income Tax demand claims rejected by a Resolution Professional that attained finality cannot be enforced against a successful Resolution Applicant post-NCLT plan approval, per Sec. 31(1) of the IBC (“Clean Slate” rule). |
| Income-Tax Act, 1961 | Sec. 194C | Astemo India (P.) Ltd. v. Addl. CIT, National e-assessment Centre | Click Here | If the AO or DRP fails to examine the factual validity of deductee certificates/declarations submitted for non-deduction of TDS on transporters under Sec. 194C(6), the issue must be remanded for fresh verification. |
| Income-Tax Act, 1961 | Sec. 271D | Yamaji Ramchandra Rithe v. Union of India | Click Here | Penalty proceedings initiated under Sec. 271D (for violations of Sec. 269SS) along with consequential demand notices should be held in abeyance if the quantum appeal against the underlying Sec. 147 assessment is still pending before the CIT(A). |