INCOME TAX DAILY DIGEST 15.05.2026

Relevant Act	Section(s)	Case Law Title	Brief Summary	Citation
Income Tax Act	Sec. 194LA / 393	Executive Engineer vs. State	Compensation awarded for the compulsory acquisition of land, including payments made under a Mediation Agreement (whether to joint or individual accounts), is not liable for TDS.	Click Here
Income Tax Act	Sec. 35(2AB) / 37 / 40A / TP	MRF Ltd. vs. Deputy Commissioner of Income-tax, Central Circle 3(3)	Disallowance of R&D expenditure by the AO based on survey statements is unsustainable when a valid DSIR certification exists. Further, TP benchmarking of the AE transaction precludes disallowance under sections 40A/37.	Click Here
Income Tax Act	Sec. 194LA / 393	Karnataka Neeravari Nigam vs. Mayappa	Compensation arising from the compulsory acquisition of land under a mediation settlement must be disbursed without any TDS deduction or the issuance of Form 16A.	Click Here
Income Tax Act	Sec. 194LA / 393	Karnataka Neeravari Nigam vs. Eranna	Reaffirming that land acquisition compensation paid through a mediation settlement is exempt from TDS, and payments must be released without deducting tax or issuing Form 16A.	Click Here
Income Tax Act	Sec. 69 / 132(4)	Principal Commissioner of Income-tax vs. M. Kiran Kumar	An addition of undisclosed income made solely on the basis of a statement recorded under section 132(4), without any corroborative evidence, is liable to be deleted.	Click Here
Income Tax Act	Sec. 56(2)(x)	Amit Gajanan Khedekar vs. ITO, Ward 22(1)(6)	Sec. 56(2)(x) applies to the acquisition of rights in a leasehold property for inadequate consideration. If the assessee objects to the stamp duty value, the AO must refer the matter to the DVO for fresh valuation.	Click Here
Income Tax Act	Sec. 4 / 5 / 145	Commissioner of Income-tax vs. Mahindra Holidays and Resorts India Ltd.	Time-share membership fees coupled with ongoing service obligations over a contract tenure cannot be taxed entirely in the year of receipt; deferring and recognizing the income over the tenure is justified.	Click Here
Income Tax Act	Sec. 147 / 148 / 271DA	Shardaben Hashmukhbhai Patel vs. Income-tax officer	Reassessment notices and consequential penalty proceedings are liable to be quashed if an identical reopening based on the same joint land transaction has already been quashed for the co-owner.	Click Here
Income Tax Act	Sec. 147 / 148	Principal Commissioner of Income-tax – 13 vs. Pradip Kumar Jajodia	Reopening an assessment based on share trading information that was already examined during the original assessment constitutes a mere “reason to suspect” rather than a “reason to believe,” making the reopening invalid.	Click Here
Income Tax Act	Sec. 148 / 149 / 150(2) / 68 / 69C	ACIT vs. Sahara City Homes	Reassessment proceedings and consequential additions are void ab initio if the underlying CIT(A) directions under section 150(2) were expunged by the Tribunal, and the section 148 notice is otherwise barred by limitation.	Click Here
Income Tax Act	Sec. 153(3) / 153(5)	Vivimed Labs Ltd. vs. ACIT	Following an ITAT remand, the limitation period under section 153(5) applies if the order simply follows principles laid down by a higher forum; if fresh verification of records is required, the limitation under section 153(3) applies.	Click Here
Income Tax Act	Sec. 32(1)(ii)	ACIT vs. Claris Ltd.	Depreciation on goodwill arising from an NCLT-approved amalgamation scheme is allowable for AY 2017-18 and AY 2018-19, as the statutory 2021 amendment disallowing such depreciation operates prospectively.	Click Here
Income Tax Act	Sec. 47(iv) / 56(2)(x)	Valeo Bayen vs. Deputy Commissioner of Income-tax, International Taxation	An intra-group transfer of shares between wholly owned Indian subsidiaries of a foreign parent involves corporate reorganization without a change in ultimate beneficial ownership and qualifies for exemption under section 47(iv).	Click Here
Income Tax Act	Sec. 147 / 148	Deputy Commissioner of Income-tax vs. Rasna (P.) Ltd.	Reassessment initiated purely on system data while completely ignoring the assessee’s detailed replies regarding an active successor PAN and a deactivated predecessor PAN reflects total non-application of mind and is invalid.	Click Here