12.5% Ad-hoc Disallowance on Alleged Bogus Purchases Deleted due to Lack of Incriminating Material   Issue Whether the Revenue can disallow purchase expenditure (specifically, an estimated 12.5% of it) under Section 37(1) solely based on employee statements recorded during a search conducted years later, without finding specific incriminating material proving the transactions were bogus. Facts… Read More »

Foreign Tax Credit allowed for past year due to Loss Set-off; MAT inapplicable to Nationalized Banks   1. Foreign Tax Credit (FTC) Allowed Despite Timing Mismatch Issue: Can a bank claim Foreign Tax Credit (FTC) in the current year (AY 2013-14) for taxes paid abroad in a previous year (AY 2012-13) if the credit was… Read More »

Industrial Development Corporation’s infrastructure activities held as Charitable; Section 11 Exemption Allowed   Issue Whether a statutory corporation established for developing industrial infrastructure (roads, drainage, water supply) is engaged in “trade, commerce, or business” under the proviso to Section 2(15) of the Income-tax Act merely because it collects fees or sells land, or if such… Read More »

IMPORTANT INCOME TAX CASE LAWS 17.01.2026 Relevant Act Section Case Law Title Brief Summary Citation Income-tax Act, 1961 Section 4 Dharmapuri District Co-operative Milk Producers Union Ltd. v. DCIT Government grant-in-aid received for the specific purpose of rehabilitation and clearing liabilities is a Capital Receipt (purpose test applied) and not a revenue receipt taxable as… Read More »

Interest on Delayed Refund under Vivad Se Vishwas Act (VSV) Allowed; Interest on Interest also granted   Issue Whether an assessee is entitled to interest under Section 244A of the Income-tax Act on a refund determined under the Direct Tax Vivad Se Vishwas Act, 2020 (DTVSV Act) if the department delays the actual payment, and… Read More »

TDS credit allowed even if not reflected in Form 26AS due to deductor’s default   Issue Whether an assessee can be denied credit for Tax Deducted at Source (TDS) solely because the amount is not reflected in Form 26AS, even though the tax was actually deducted from the income but not deposited by the deductor… Read More »

Surcharge on Discretionary Trusts restricted to slab rates; Flat 37% surcharge rejected   Issue Whether an Assessing Officer (AO) can levy a flat surcharge of 37% on a charitable trust (assessed as an AOP without Section 12A registration) where the income is chargeable at the Maximum Marginal Rate (MMR), or if the surcharge must follow… Read More »

Notice under Section 148A(b) quashed for confusing “Inquiry” with “Show Cause”   Issue Whether an Assessing Officer (AO) can issue a notice under Section 148A(b) to call for information and conduct an inquiry, effectively mixing the distinct stages of Section 148A(a) (inquiry) and Section 148A(b) (show cause). Facts Assessment Year: 2019-20. Source of Action: The… Read More »

Additions based on uncorroborated WhatsApp chats and selective reading of seized documents deleted   Issue The central issue across these five distinct rulings is the evidentiary value of materials found during search and seizure operations—specifically, whether loose sheets, WhatsApp chats, and internal ledgers can be used to make additions under Sections 68 and 69A without… Read More »