Notional interest cannot be taxed under mercantile system when debt recovery is improbable due to financial distress.

By | August 10, 2026
0 Comment

Notional interest cannot be taxed under mercantile system when debt recovery is improbable due to financial distress. Issue Whether notional interest can be added to the income of an assessee following the mercantile system of accounting on outstanding balances recoverable from debtor concerns whose financial position has severely deteriorated. Facts Accounting Method: The assessee-firm followed… Read More »

Revaluation of existing leasehold rights without cash inflow or new asset acquisition cannot be taxed under Section 69.

By | August 10, 2026
0 Comment

Revaluation of existing leasehold rights without cash inflow or new asset acquisition cannot be taxed under Section 69. Issue Whether the revaluation of an existing tenancy/leasehold right by a firm, without acquiring any new asset, paying consideration, or introducing funds, can be treated as an unexplained investment under Section 69 of the Income-tax Act, 1961… Read More »

Capital contribution received from newly inducted partner via demand drafts cannot be taxed under Section 68.

By | August 10, 2026
0 Comment

Capital contribution received from newly inducted partner via demand drafts cannot be taxed under Section 68. Issue Whether an addition made under Section 68 of the Income-tax Act, 1961 / Section 102 of the Income-tax Act, 2025 as an unexplained cash credit is sustainable when a partner’s capital contribution is received through demand drafts and… Read More »

An allotment letter constitutes an agreement under Section 56(2)(x) proviso if consideration was fixed and paid via banking channels.

By | August 10, 2026
0 Comment

An allotment letter constitutes an agreement under Section 56(2)(x) proviso if consideration was fixed and paid via banking channels. Issue Whether an unregistered allotment letter can constitute an “agreement fixing the amount of consideration” under the first proviso to Section 56(2)(x) of the Income-tax Act, 1961 / Section 92 of the Income-tax Act, 2025, thereby… Read More »

Disallowance of unsubstantiated marketing expenses is restricted to Rs. 5 lakhs, and Section 270A penalty is deleted.

By | August 10, 2026
0 Comment

Disallowance of unsubstantiated marketing expenses is restricted to Rs. 5 lakhs, and Section 270A penalty is deleted. Issue Whether the complete disallowance of marketing expenses supported only by self-made vouchers is justified under Section 37(1) of the Income-tax Act, 1961 / Section 34 of the Income-tax Act, 2025, when the expenditure is reasonable relative to… Read More »

A trust predominantly engaged in cow protection cannot be classified as a religious entity or denied Section 80G approval based on dormant temple clauses or Gita discourses.

By | August 10, 2026
0 Comment

A trust predominantly engaged in cow protection cannot be classified as a religious entity or denied Section 80G approval based on dormant temple clauses or Gita discourses. Issue Whether a trust with dominant objects of cow protection, animal welfare, and ethical value education can be categorized as a “Religious Entity” under Section 12AB due to… Read More »

Valid registration granted under Section 12A(1)(ac)(i) cannot be invalidated during renewal without proper cancellation procedures.

By | August 10, 2026
0 Comment

Valid registration granted under Section 12A(1)(ac)(i) cannot be invalidated during renewal without proper cancellation procedures. Valid registration granted under Section 12A(1)(ac)(i) cannot be invalidated during renewal without proper cancellation procedures. Issue Whether the CIT(Exemptions) can reject a renewal application filed under Section 12A(1)(ac)(ii) on the ground that the original provisional/migrated registration under Section 12A(1)(ac)(i) was… Read More »

Ex-gratia payment under BSNL VRS-2019 qualifies as retrenchment compensation fully exempt under Section 10(10B).

By | August 10, 2026
0 Comment

Ex-gratia payment under BSNL VRS-2019 qualifies as retrenchment compensation fully exempt under Section 10(10B). Ex-gratia payment under BSNL VRS-2019 qualifies as retrenchment compensation fully exempt under Section 10(10B). Issue Whether ex-gratia compensation received by a retired BSNL employee under the BSNL VRS-2019 is eligible for exemption as retrenchment compensation under Section 10(10B) rather than being… Read More »

Ex-gratia under BSNL Voluntary Retirement Scheme is capital receipt exempt as retrenchment compensation under Section 10(10B).

By | August 10, 2026
0 Comment

Ex-gratia under BSNL Voluntary Retirement Scheme is capital receipt exempt as retrenchment compensation under Section 10(10B). Issue Whether ex-gratia compensation received by BSNL employees under the BSNL Voluntary Retirement Scheme, 2019 constitutes retrenchment compensation under Section 10(10B) and is fully exempt from tax as a capital receipt, rather than being restricted to the Rs. 5… Read More »

Providing transportation services on commercial lines to school students does not constitute charitable purpose under section 2(15).

By | August 10, 2026
0 Comment

Providing transportation services on commercial lines to school students does not constitute charitable purpose under section 2(15). Issue Whether an institution providing student transport services on commercial lines against a fee, generating recurring surpluses, is entitled to regular registration under Section 12AB as a charitable entity under Section 2(15) of the Income-tax Act, 1961 /… Read More »