Income Tax Case laws 02.08.2026

Relevant Act	Section	Case Law Title	Citation	Brief Summary
PBPT Act, 1988	Section 2(9)	Lakshya Jewels v. Initiating Officer, DCIT (BPU)	Click Here	Unexplained deposit of demonetized currency followed by RTGS transfers fell within “benami transaction” under Sec 2(9) r.w.s. 2(26), warranting provisional attachment.
Income-tax Act, 1961	Section 2(15)	Mandke Foundation v. CIT (Exemption)	Click Here	Commerciality, premium facilities, or surplus cannot negate a hospital’s charitable character without findings of private enrichment or non-charitable income diversion.
Income-tax Act, 1961	Section 9	Saint Gobain India (P.) Ltd. v. Deputy Commissioner of Income-tax	Click Here	Disallowance u/s 40(a)(i) for non-TDS on export commission was upheld after assessee conceded MFN claim under India-Belgium DTAA was invalid post-Nestle SA SC ruling.
Income-tax Act, 1961	Section 9	DBS Bank Ltd. v. Additional Director of Income-tax, (IT)	Click Here	Interest paid by Indian PE of a Singapore bank to its HO/overseas branches is deductible in computing PE profits under Article 7 of India-Singapore DTAA.
Income-tax Act, 1961	Section 9	DBS Bank Ltd. v. Additional Director of Income-tax, (IT)	Click Here	Surcharge and cess cannot be levied over DTAA-capped tax rates; however, where no rate is capped by treaty, surcharge/cess are leviable per domestic tax law.
Income-tax Act, 1961	Section 9	DBS Bank Ltd. v. Additional Director of Income-tax, (IT)	Click Here	Sec 244A interest on tax refund earned by a Singapore resident bank’s Indian PE is taxable at 15% as ‘interest’ under Article 11, not as business profits.
Income-tax Act, 1961	Section 9	Play Games 24X7 (P.) Ltd. v. ACIT	Click Here	Payments to Facebook Ireland for online banner ads without server control/technical services are not Royalty/FTS; no Sec 40(a)(i) disallowance for non-TDS u/s 195.
Black Money Act, 2015	Section 10	Pascal Postel v. Deputy Director of Income-tax (Investigation)	Click Here	Assessee can challenge underlying quantum on merits in an appeal against a Sec 10/12 rectification order levying Sec 40 interest; matter remanded to CIT(A).
Income-tax Act, 1961	Section 12AB	Bai Manekbai a Dubash Hareshwar Pandit Trust v. CIT (Exemptions)	Click Here	CIT(E) cannot attach caveats making Sec 12AB/80G approvals conditional on the outcome of a proposed Supreme Court challenge against High Court order.
Income-tax Act, 1961	Section 12AB	Mandke Foundation v. CIT (Exemption)	Click Here	Disagreements over overseas medical equipment spending u/s 11(1)(c) do not justify refusal of renewal or cancellation of Sec 12AB trust registration.
Income-tax Act, 1961	Section 12AB	Mandke Foundation v. CIT (Exemption)	Click Here	Retrospective cancellation of Sec 12AB registration without establishing fraud, misrepresentation, or suppression of facts is legally unjustified.
Income-tax Act, 1961	Section 12AB	Mandke Foundation v. CIT (Exemption)	Click Here	Alleged non-compliance with the Maharashtra Public Trusts Act/IPF Scheme cannot trigger Sec 12AB cancellation/refusal absent findings by competent authority.
Income-tax Act, 1961	Section 14A	Saint Gobain India (P.) Ltd. v. Deputy Commissioner of Income-tax	Click Here	No Rule 8D(2)(ii) disallowance where own funds exceed investments; under Rule 8D(2)(iii), only investments actually yielding exempt income can be considered.
Income-tax Act, 1961	Section 14A	Principal Commissioner of Income-tax v. Gujarat Urja Vikas Nigam Ltd.	Click Here	Sec 14A disallowance cannot be added back to compute book profits for Minimum Alternate Tax (MAT) under Section 115JB.
Income-tax Act, 1961	Section 14A	Sun Pharmaceutical Industries Ltd. v. Deputy Commissioner of Income-tax	Click Here	Sec 14A read with Rule 8D disallowance cannot be imported into Explanation 1, clause (f) of Sec 115JB(2) MAT computations.
Income-tax Act, 1961	Section 32	Saint Gobain India (P.) Ltd. v. Deputy Commissioner of Income-tax	Click Here	Software licenses capitalized alongside computer systems qualify as computer software eligible for higher computer depreciation rate, not 25%.
Income-tax Act, 1961	Section 32	Saint Gobain India (P.) Ltd. v. Deputy Commissioner of Income-tax	Click Here	Goodwill arising on amalgamation of group companies as well as on slump sale acquisition is an intangible asset eligible for depreciation u/s 32.
Income-tax Act, 1961	Section 35	Sun Pharmaceutical Industries Ltd. v. Deputy Commissioner of Income-tax	Click Here	Weighted deduction u/s 35(2AB) allowed for R&D ancillary expenses (trademarks, repairs, taxes, refreshments) following consistent precedent.
Income-tax Act, 1961	Section 36(1)(iii)	Sun Pharmaceutical Industries Ltd. v. Deputy Commissioner of Income-tax	Click Here	Interest on bank loan taken to fund an out-of-court patent litigation settlement is allowable business expenditure u/s 36(1)(iii).
Income-tax Act, 1961	Section 36(1)(iii)	Principal Commissioner of Income-tax v. Gujarat Urja Vikas Nigam Ltd.	Click Here	Addition for capitalizing interest to CWIP deleted as investments and building expenditures were backed by sufficient interest-free funds.
Income-tax Act, 1961	Section 37(1)	Saint Gobain India (P.) Ltd. v. Deputy Commissioner of Income-tax	Click Here	Infrastructure/land development charges for long-term lease of industrial land from SIPCOT without asset ownership are allowable revenue expenses.
Income-tax Act, 1961	Section 37(1)	Sun Pharmaceutical Industries Ltd. v. Deputy Commissioner of Income-tax	Click Here	Treatment of software expenditure as capital asset with corresponding depreciation upheld since full amount had already been claimed or allowed as depreciation.
Income-tax Act, 1961	Section 37(1)	Sun Pharmaceutical Industries Ltd. v. Deputy Commissioner of Income-tax	Click Here	Reallocation of group R&D expenditure strictly based on turnover ratio of manufactured formulations was held unsustainable.
Income-tax Act, 1961	Section 37(1)	Sun Pharmaceutical Industries Ltd. v. Deputy Commissioner of Income-tax	Click Here	Ad hoc disallowance of genuine business promotion/gift expenses is invalid merely due to minor lack of complete recipient particulars.
Income-tax Act, 1961	Section 37(1)	Sun Pharmaceutical Industries Ltd. v. Deputy Commissioner of Income-tax	Click Here	Compensatory out-of-court payment to Cephalon Inc. for resolving US patent litigation is allowable revenue expenditure u/s 37(1).
Income-tax Act, 1961	Section 37(1)	Sun Pharmaceutical Industries Ltd. v. Deputy Commissioner of Income-tax	Click Here	Post-demerger US patent litigation settlement protecting market and reputation is a genuine business revenue expense not barred by Explanation 1.
Income-tax Act, 1961	Section 37(1)	Egger Pumps India (P.) Ltd. v. Income-tax Officer	Click Here	Forex loss from year-end restatement of ECB availed from parent company for acquiring capital assets is capital in nature, hence not deductible u/s 37(1).
Black Money Act, 2015	Section 40	Pascal Postel v. Deputy Director of Income-tax (Investigation)	Click Here	Sec 40(1) & 40(2) interest isn’t leviable on senior citizens without business income for foreign income quantum disputes absent deliberate suppression.
Income-tax Act, 1961	Section 40(a)(ia)	Play Games 24X7 (P.) Ltd. v. ACIT	Click Here	Standard banner ad payments to Facebook Ireland without server access or technical service rights do not attract tax deduction u/s 195/disallowance u/s 40(a)(i).
Income-tax Act, 1961	Section 43A	Saint Gobain India (P.) Ltd. v. Deputy Commissioner of Income-tax	Click Here	Principal Only Swap (POS) hedging charges for ECBs do not add to actual capital cost u/s 43A; deductible as revenue expenditure u/s 37(1).
Income-tax Act, 1961	Section 45	DBS Bank Ltd. v. Additional Director of Income-tax, (IT)	Click Here	Gains on cancellation of forex forward contracts entered by Singapore resident to hedge Indian investment currency risks are assessable as Capital Gains.
Income-tax Act, 1961	Section 50C	ECI Technology (P.) Ltd. v. Assistant Commissioner of Income-tax	Click Here	Reopening assessment beyond 4 years on Sec 50C capital gains without new tangible material or non-disclosure amounts to invalid change of opinion.
Income-tax Act, 1961	Section 56	Ramesh v. Income-tax Officer	Click Here	Sec 56(2)(x)(b) addition based solely on stamp valuation difference is unsustainable without independent evidence of actual higher fair market value.
Income-tax Act, 1961	Section 69A	Ramesh v. Income-tax Officer	Click Here	Large cash deposits supported by confirmations/bank statements cannot be added u/s 69A merely due to AO’s subjective dissatisfaction.
Income-tax Act, 1961	Section 69A	Ramesh v. Income-tax Officer	Click Here	Property purchase where major consideration was set off against prior mortgage advance and rest via bank cannot be added as unexplained money.
Income-tax Act, 1961	Section 69A	Manoj Naveen Patel v. ACIT	Click Here	Rs. 7 lakhs cash in joint locker explained via gifts, family contributions, and savings supported by bank statements cannot be added u/s 69A without rebuttal.
Income-tax Act, 1961	Section 80G	Mandke Foundation v. CIT (Exemption)	Click Here	Rejection of Sec 80G approval cannot survive once the underlying order cancelling Sec 12AB registration is set aside.
Income-tax Act, 1961	Section 80GGC	Meetkumar Hasmukhbhai Chaturvedi v. Income-tax Officer	Click Here	Deduction for political donation via banking channels disallowed as investigation proved it was a non-genuine accommodation entry.
Income-tax Act, 1961	Section 80JJAA	Saint Gobain India (P.) Ltd. v. Deputy Commissioner of Income-tax	Click Here	Sec 80JJAA deduction cannot be denied if new workmen complete prescribed employment period in subsequent year (Finance Act 2018 amendment is retrospective).
Income-tax Act, 1961	Section 92B	Elgi Rubber Co. Ltd. v. Deputy Commissioner of Income-tax	Click Here	Receivables from AEs arising out of benchmarked main transactions follow a uniform non-interest policy and don’t form a separate international transaction.
Income-tax Act, 1961	Section 92C	Elgi Rubber Co. Ltd. v. Deputy Commissioner of Income-tax	Click Here	Full recovery of SBLC bank charges from overseas AEs constitutes arm’s length compensation for guarantee transaction subject to verification.
Income-tax Act, 1961	Section 92C	Elgi Rubber Co. Ltd. v. Deputy Commissioner of Income-tax	Click Here	Treating bad debts write-off as non-operating and forex gains as operating brought assessee’s PLI under TNMM within arm’s length range.
Income-tax Act, 1961	Section 92C	Elgi Rubber Co. Ltd. v. Deputy Commissioner of Income-tax	Click Here	Segregating export sales commission from closely linked transactions to evaluate ALP at nil under TNMM is unsustainable.
Income-tax Act, 1961	Section 92C	DBS Bank Ltd. v. Additional Director of Income-tax, (IT)	Click Here	Guarantee commission TP adjustment for foreign bank PE must be restricted only to the difference between internal CUP rate and fee recovered.
Income-tax Act, 1961	Section 92C	Sun Pharmaceutical Industries Ltd. v. Deputy Commissioner of Income-tax	Click Here	Captive power plant electricity transfer TP additions deleted where identical factual and legal matrix was ruled in favor of assessee in prior years.
Income-tax Act, 1961	Section 92C	Sun Pharmaceutical Industries Ltd. v. Deputy Commissioner of Income-tax	Click Here	Notional interest TP adjustments on loans and share application money given to AEs deleted following binding precedent in assessee’s own prior cases.
Income-tax Act, 1961	Section 92C	Sun Pharmaceutical Industries Ltd. v. Deputy Commissioner of Income-tax	Click Here	Upward TP adjustment on sales to AE deleted following earlier Tribunal decisions under identical facts and legal positions.
Income-tax Act, 1961	Section 115JB	Sun Pharmaceutical Industries Ltd. v. Deputy Commissioner of Income-tax	Click Here	Provision created for wealth tax cannot be added back to book profits for the purpose of Minimum Alternate Tax (MAT) u/s 115JB.
Income-tax Act, 1961	Section 119	Bhupathi Hotels Ltd. v. Centralized Processing Centre	Click Here	Condonation of delay applications for tax refunds cannot be rejected solely on CBDT’s 6-year circular limit; Sec 119(2)(b) allows consideration beyond 6 years.
Income-tax Act, 1961	Section 154	Surajit Ghosh v. Income-tax Officer	Click Here	Rectification order passed beyond limitation, without proof of Sec 154(3) notice service, and lacking a DIN is invalid and liable to be set aside.
Income-tax Act, 1961	Section 254	Mashreq Bank PSC. v. Deputy Director of Income Tax (IT)	Click Here	A 6-year delay in filing cross-objection before ITAT cannot be condoned merely because the prevailing legal position was previously unfavorable.
Income-tax Act, 1961	Section 254	Cisco Systems Inc v. Deputy Commissioner of Income-tax, International Taxation	Click Here	Rectification application against stay order is unmaintainable if assessee fails to establish an error in the stay order itself, despite recovery of demand by AO.
Income-tax Act, 1961	Section 260A	Iron Build Systems (P.) ltd. v. Assistant Commissioner of Income-tax	Click Here	Tribunal erred in refusing to condone a 712-day delay where CIT(A) order was received by Accounts Manager but not brought to management’s attention.
Income-tax Act, 1961	Section 263	Mirum Digital (P.) Ltd. v. Principal Commissioner of Income-tax	Click Here	Sec 263 revision for “inadequate inquiry” on client reimbursement exclusions is invalid where AO examined reconciliations and PCIT conducted no fresh inquiry.
Income-tax Act, 1961	Section 268A	Principal Commissioner of Income-tax v. Arvind Dwarkadas Purohit	Click Here	Appeals filed prior to 20-8-2018 below monetary limits are subject to dismissal; subsequent CBDT exception letters cannot be applied retrospectively.