10 Important Case laws on Income Tax as on 19.01.2025
| Title | Summary | Citation | Relevant Act & Section |
|---|---|---|---|
| Section 2(47) of the Income-tax Act, 1961 | Reduction in Share Capital Covered Under Transfer | Reduction in a subsidiary’s share capital and the consequent proportionate reduction in the holding company’s shareholding constitute a “sale, exchange, or relinquishment of asset” under Section 2(47). | Principal Commissioner of Income-tax v. Jupiter Capital (P.) Ltd. |
| Section 12AB of the Income-tax Act, 1961 | Charitable or Religious Trust – Procedure for Fresh Registration | If a trust’s registration is canceled due to non-filing of a reply to a show cause notice, the Commissioner (Exemption) should grant a final opportunity to the trust to substantiate its case before making a decision. | Jalna Maheshwari Charitable Foundation v. Commissioner of Income-tax (Exemption) |
| Section 32 of the Income-tax Act, 1961 | Depreciation – Allowance/Rate of | Depreciation on new assets acquired from a Port Trust should be allowed based on their actual cost, not the amortized value of the assets at the Port Trust. | AMNS Ports Vizag Terminals Ltd. v. PCIT, Ahmedabad-1 |
| Section 36(1)(iv) of the Income-tax Act, 1961 | Provident Fund, Contributions Towards Recognized | Employer’s contribution to employee provident fund should be allowed within the limit prescribed by Rule 87, even if it exceeds 27% of salary. | AMNS Ports Vizag Terminals Ltd. v. PCIT, Ahmedabad-1 |
| Section 68 of the Income-tax Act, 1961 | Cash Credit | No addition under Section 68 is required if the assessee can explain the source of funds for a gift received, even if the asset is not immediately sold or transferred. Recording Fair Market Value of Gifted Property Not Unexplained Cash Credit: Tax Implications Arise Upon Sale or Transfe | Income-tax Officer v. Inder Jaggi |
| Section 68 of the Income-tax Act, 1961 | Unexplained Investments | Addition under Section 68 deleted where the assessee provided proper explanation and documentary evidence for an investment, even if a confirmation from the foreign entity was not obtained. | Sheela Ashok Bafna v. Income-tax Officer |
| Section 68 of the Income-tax Act, 1961 | Unexplained Investments | Reopening Notice Upheld for Accommodation Entries During Demonetisation Period | R.K. Bullion v. Assistant Commissioner of Income-tax |
| Section 68 of the Income-tax Act, 1961 | Unexplained Investments | Addition under Section 68 not made where directors of a company borrow unsecured loans to invest in the company, as long as the source of the loans is explained. | Canbara Infra (P.) Ltd. v. Assistant Commissioner of Income-tax |
| Section 92C of the Income-tax Act, 1961 | Transfer Pricing – Computation of Arm’s Length Price | If the assessee fails to prove that outstanding receivables from associated enterprises (AEs) and normal sales transactions are interlinked, the lower authorities are correct in benchmarking them separately. | Biocon Biologicals Ltd. v. Assistant Commissioner of Income-tax |
| Section 250 of the Income-tax Act, 1961 | Commissioner (Appeals) – Procedure of | Where the Commissioner (Appeals) dismisses an appeal ex parte due to the assessee’s failure to file written submissions or give evidence, the matter should be remanded back if the non-appearance was due to a lack of notice or effective hearing opportunity. | Alps Construction v. ITO |