Income Tax Act, 1961

Mis Ganapathy & Co. claimed deductions for service charges paid to Mis Universal Trading Company, a loss incurred in its film business, and a donation to Aparna Ashram. The Assessing Officer disallowed all three claims, the Income Tax Appellate Tribunal (ITAT) reversed the disallowances, and the Karnataka High Court, e…

The Supreme Court examined whether the term "change of opinion" in Section 147 of the Income Tax Act, 1961 was eliminated after the 1 April 1989 amendment. The Court traced the evolution of Section 147 from its original wording, through the 1987 amendment that introduced "opinion", to the 1989 amendment that reinstated…

Sunny Abraham, an Assistant Commissioner of Income Tax, was subjected to disciplinary proceedings under Rule 14 of the Central Civil Services (Classification, Control and Appeal) Rules, 1965. A charge memorandum was issued on 18 Nov 2002 without the Finance Minister’s (the Disciplinary Authority’s) approval, which was …

Vijay Industries, a small‑scale supplier of castor oil, sued Natl Technologies for non‑payment of invoices and for interest on delayed payments, filing a winding‑up petition under Sections 433(e), 433(f) and 434 of the Companies Act, 1956. The respondent argued that interest was not a debt because there was no explicit…

The appellants were assessed for AY 1992-93 and appealed, resulting in partial modifications and a waiver of interest. A demand was re‑computed on 31‑12‑1998 and remained unpaid when the appellants filed a declaration under Section 88 of the Kar Vivad Samadhan Scheme (Finance Act, 1998). The designated authority reject…

The dispute arose over the period for which interest under Section 234B (and related sections 234A, 234C) could be levied by the Income Tax Settlement Commission after an assessee disclosed previously undisclosed income under Section 245C. The revenue argued that interest should be limited to the date of regular assess…

The Revenue appealed against an order of the Income Tax Settlement Commission concerning Daman! Brothers' settlement application. The Supreme Court examined whether the Commission could waive or reduce interest under Section 220(2) while exercising powers under Section 245(4), whether assessment orders issued before th…

The Union of India filed disciplinary proceedings against IRS officer Upendra Singh alleging that, while handling income‑tax proceedings under sections 133A, 144A and 143(1) of the Income Tax Act, he acted illegally by ignoring incriminating evidence, acquiescing to a reduced disclosure by the assessee and directing pr…

M/s Polyflex (India) Pvt Ltd manufactures polyurethane foam, which is supplied to assemblers for making automobile seats. The company claimed a deduction under Section 80‑IB of the Income Tax Act for AY 2003‑04, but the assessing officer disallowed it on the ground that the foam falls within entry 25 of the Eleventh Sc…

The Union of India advertised vacancies for members of the Income‑Tax Appellate Tribunal (ITAT) and a Selection Board placed 18 candidates on a main list, of which 16 were approved for appointment by the Appointments Committee. Three candidates were placed on a wait‑list. The Committee decided that any further appointm…

Sedco Forex International Drill Inc., a Panama‑incorporated company, supplied oil rigs and UK‑resident employees to ONGC under a wet‑lease arrangement. The employment contracts required alternating periods of work in India (≈35 days) and “field breaks” in the UK, during which employees received their full salary for tr…

The petitioner C.B. Gautam sought to purchase a lease‑hold plot in Delhi, but the Income Tax authority ordered its compulsory purchase by the Central Government under Section 269UD of the Income‑Tax Act, 1961, without giving any reasons or a chance to be heard. The Supreme Court examined whether Chapter XX‑C of the Act…

The appellants, tenants of a three‑storeyed building, continued to occupy the premises after the owner sold it to the respondents. The Central Government, under Chapter XX‑A of the Income Tax Act, 1961, initiated acquisition proceedings, issued notices to the tenants, and eventually ordered acquisition, directing the t…

The Central Bureau of Investigation (CBI) filed a criminal case against Arvind Khanna for receiving Rs 9.04 crore from eight foreign entities without prior government permission, alleging violation of the Foreign Contribution (Regulation) Act (FCRA) 1976. The trial court took cognizance under the FCRA 2010, but the CBI…

The Supreme Court examined two Special Leave Petitions filed by IDBI Bank Ltd. challenging a High Court order that dismissed its application to execute a sale deed of KOFL's sole immovable property and revived winding‑up proceedings against KOFL. The Court held that the winding‑up petition must be revived because the m…

The Commissioner of Income Tax, Rajkot appealed against M/s Gujarat Siddhi Cement Ltd.'s claim of an investment allowance for additional costs incurred on plant and machinery due to foreign exchange rate fluctuations for the assessment year 1993-94. The assessing officer disallowed the claim, holding that the assets we…

M/s Mitsubishi Corporation, a non‑resident Japanese company, was assessed for income attributable to its Indian operations for the years 1998‑99 to 2004‑05 and was levied interest under section 234B of the Income‑Tax Act for alleged default in payment of advance tax. The company argued that, because tax was deductible …

Dipesh Chandak, an accused in the Bihar fodder scam, was granted a pardon by a Special CBI Judge under Section 306 of the Criminal Procedure Code on the condition that he make a full and complete disclosure of the misappropriation of funds. The Income Tax Department later issued a show‑cause notice for alleged filing o…

Sun Engineering Works filed loss returns for assessment years 1960-61 and 1961-62 after the statutory time limit; the Income Tax Officer treated the returns as "no demand" and did not allow the losses. The assessee later disclosed Hundi loans, which the Officer treated as escaped income and, under sections 147 and 148,…

The appellants, a group of social clubs including Secunderabad Club, deposited surplus funds in various banks, some of which were corporate members of the clubs, and earned interest on those fixed deposits. The central issue was whether such interest income fell within the ambit of the principle of mutuality and theref…

The State Government fixed lease rent for land allotted to the assessee in 1988, which the assessee contested but was rejected in 1991. The assessee claimed a deduction of the accumulated lease rent in Assessment Year (AY) 1992‑93, arguing that the dispute was sub‑judice until the State’s final decision. The Assessing …

The appellants, bona‑fide tenants of a property owned by Krishna Budha Gawde, challenged the forfeiture of that property under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (SAFEMA). Gawde had been detained under COFEPOSA and his property was declared “illegally acquired” and forfei…

The Tax Recovery Officer (TRO) filed intervention applications in a Special Court seeking priority payment of income‑tax dues from Mis. Killick Nixon Pvt. Ltd. after its assets were auctioned in execution of a decree in favour of Mis. Dhanraj Mills Pvt. Ltd., the notified party. The Special Court rejected the applicati…

Bharat Carbon and Ribbon Manufacturing Co. manufactured carbon paper, which was later classified as coated paper under Item 17(2) of the Central Excise Tariff, leading to a demand for excise duty for the years 1976-77, 1978-79 and 1979-80. The company challenged the levy by filing a writ petition but claimed a deductio…

The Transmission Corporation of A.P. Ltd. (the assessee) paid large sums to non‑resident companies for purchase, erection and commissioning of plant equipment between 1966‑67 and 1972‑73 without deducting tax at source under Section 195 of the Income‑Tax Act, 1961. The Income‑Tax Officer levied tax under Section 195, b…

The respondent, a bus conductor of the U.P. State Road Transport Corporation, was dismissed for allegedly erasing way‑bills and reselling tickets. He contended that carbon copies of crucial documents were withheld during the disciplinary enquiry, causing prejudice. The trial court and first appellate court rejected his…

The petitioner, a proprietor of a food business, filed income‑tax returns that were later found to contain false statements and suppressed transactions after a search of his premises. Complaints were lodged against him under sections 276C and 277 of the Income‑Tax Act and sections 193 and 196 of the Indian Penal Code, …

The Supreme Court examined whether Ultratech Cement Ltd. was entitled to a 75% capital investment subsidy under the Rajasthan Investment Promotion Scheme, 2003 (RIPS-2003) for its Kotputli cement plant. The Court held that the scheme’s sub‑clauses (vi) and (vii) granting 75% subsidy were deleted before the company’s ap…

Tarsem Kumar was intercepted by Customs in 1970, and Rs.93,500 in cash, gold sovereigns and his car were seized and placed under the custody of the Customs department. After the Customs seizure was quashed, the Income Tax Department issued a warrant under section 132 of the Income‑Tax Act to seize the cash from the Cus…

The firm Amar Singh Gowamal & Sons, originally registered under the Income Tax Act, 1922 up to assessment year 1961‑62, altered its partnership constitution on 8 November 1961. It applied for registration under the Income Tax Act, 1961 on 29 September 1962 (Form UA). The Income‑Tax Officer rejected the application invo…

The petitioners, chartered accountants, challenged the Council of the Institute of Chartered Accountants of India's Guidelines dated 08‑08‑2008 that capped the number of tax audits a member could undertake under section 44AB of the Income Tax Act. They argued that the restriction was beyond the Council's competence, vi…

The Advocate Association Bengaluru filed a contempt petition alleging that the Appointments Committee of the Cabinet (ACC) had appointed members to the Income Tax Appellate Tribunal (ITAT) based on reports and feedback obtained after the Search‑cum‑Selection Committee (SCSC) had made its recommendations, without placin…

The Commissioner of Income Tax, Pune appealed against a Bombay High Court judgment that had upheld the assessment of Shirke Construction Equipment Ltd. The issues were whether Section 80‑AB of the Income Tax Act applies to Section 80‑HHC and whether unabsorbed business losses under Section 72 can be set off against pro…

The appellant, a partnership firm, made a voluntary disclosure under the Voluntary Disclosure of Income Scheme, 1997 and received a certificate of immunity. Later, a search and seizure operation on the firm’s partners uncovered undisclosed income that the firm had failed to reveal in its VDIS application. The Commissio…

The United Provinces Electric Supply Co. (assessee) had its electricity undertakings compulsorily acquired by the Uttar Pradesh Government under the Indian Electricity Act, 1910. The government paid Rs. 3,35,84,552 as compensation, which the assessee accepted under protest while pending arbitration for the final amount…

Reliance Petroproducts Pvt. Ltd. claimed a deduction of Rs.28,77,242 for interest on loans used to purchase IPL shares in its income‑tax return for AY 2001‑02. The assessing authority disallowed the claim and initiated penalty proceedings under s.271(1)(c) of the Income Tax Act, alleging concealment of income or furnis…

Kasturi and Sons Ltd., a newspaper publisher, bought an aircraft for Rs.3,31,455 and insured it for Rs.4,00,000 with a clause allowing the insurer to replace the aircraft in case of loss. After the aircraft was destroyed, the insurer exercised the option and supplied a new aircraft costing Rs.3,50,000 plus Rs.25,000 ex…

Catholic Syrian Bank Ltd. appealed against the Commissioner of Income Tax, Thrissur, challenging the denial of a deduction for bad debts under Section 36(1)(vii) of the Income Tax Act, 1961. The bank argued that deductions under Section 36(1)(vii) (write‑off of irrecoverable debts) are independent of those under Sectio…

The petitioners were retirees of Assam Oil Company Ltd., which was nationalised in 1981 and its assets, including a 1973 pension fund, were transferred to the successor Indian Oil Corporation (Assam Oil Division) under the Burmah Oil Company (Acquisition) Act. The corporation later introduced a revised pension scheme i…

Berger Paints India Ltd. claimed deductions under Section 43B of the Income Tax Act for customs and excise duties actually paid and for duties included in the valuation of its closing stock for the assessment years 1984-85, 1986-87 and 1987-88. While the Assessing Officer allowed the deduction for 1984-85, the Commissi…

The Commissioner of Customs issued a show‑cause notice to Indian Oil Corporation alleging that the company had misdeclared the value of imported petroleum products by including demurrage charges paid to ship owners. The Revenue demanded additional customs duty and penalty, but the Customs Excise and Gold (Control) Appe…

The Supreme Court examined whether the order of the Appropriate Authority under Sections 269‑UD, 269‑UC and 269‑UE of the Income Tax Act, 1961, for the pre‑emptive purchase of an immovable property was valid after the Court had set aside a High Court judgment. The petitioners argued that the Central Government had not …

Three income‑tax appeals before the Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) involved a common question of law under section 115‑J of the Income Tax Act. The President of the ITAT, exercising his power under section 255(3), constituted a Special Bench of three members to hear the appeals, which were …

The State of Karnataka and the Union of India issued a notification under Section 4(1) of the Land Acquisition Act, 1894 to acquire 114 acres for the Defence Research & Development Organisation, dispensing with the enquiry under Section 5A by invoking Section 17(4) and publishing a declaration under Section 6 on June 2…

The case arose from a complaint by the mother of a pre‑term baby who became totally blind due to alleged failure to screen for Retinopathy of Prematurity (ROP). The National Consumer Disputes Redressal Commission held the hospital and three doctors negligent and awarded Rs. 64,00,000 in compensation. On appeal, the Sup…

The Supreme Court examined the true nature of Section 1OA of the Income‑Tax Act, 1961, as amended by the Finance Acts of 2000 and 2003, to determine whether it confers an exemption or a deduction and at what stage the benefit should be applied. The Court considered whether the provision falls within the computation of …

The Supreme Court examined whether Minimum Alternate Tax (MAT) credit under Section 115JAA of the Income Tax Act, 1961 must be set off against assessed tax before computing interest under Sections 234A, 234B and 234C. It held that the tax paid under Section 115JA is a "tax" within the meaning of the Act and the credit …

Bihari Lal Jaiswal obtained a retail liquor licence under the Madhya Pradesh Excise Rules and entered into a partnership with ten others to run the business. He applied for registration of the partnership under sections 184 and 185 of the Income Tax Act, but the Income Tax Officer rejected the application because the p…

The Supreme Court examined two tax disputes. In Commissioner of Income Tax, Kanpur v. Kamla Town Trust, a trust created in 1941 for workers’ housing was rectified in 1945 and 1955; the Court held that the 1945 deed did not create a public charitable trust, denying exemption for 1949‑55, but the 1955 deed had wholly cha…

The case concerned whether a scheduled bank could claim a tax deduction for the broken‑period interest paid when it purchased government securities that are classified as Held‑to‑Maturity (HTM). The bank argued that the securities are stock‑in‑trade, so the broken‑period interest is a revenue expense deductible under S…

The case concerned Bharti Hexacom Ltd. and other telecom operators who paid a variable annual licence fee to the Department of Telecommunications under the New Telecom Policy of 1999. The issue was whether these payments were capital in nature, requiring amortisation under Section 35ABB of the Income Tax Act, 1961, or …

The dispute involved the A.P. Power Coordination Committee and related entities (appellants) and M/s. LanCo Kondapalli Power Ltd. (respondent) over capacity‑charge bills and a claim for reimbursement of Minimum Alternate Tax (MAT) under their Power Purchase Agreement (PPA). The key questions were whether the Limitation…

The respondent filed belated income‑tax returns for assessment years 1978‑79 to 1980‑81 after a search and seizure under Section 132 of the Income‑Tax Act, and the assessing officer made assessments higher than the returns. He was prosecuted under Section 276‑C for willful tax evasion. The respondent sought relief unde…

The Palai Central Bank Ltd went into liquidation on 8 August 1960. The Income‑Tax Officer assessed its taxable income for AY 1963‑64 at Rs 5,79,678 and held that super profits tax was also payable, directing the bank to file a return under the Super Profits Tax Act, 1963. The bank filed a return showing nil chargeable …

M/s Shasun Chemicals and Drugs Ltd., a pharmaceutical manufacturer, raised funds through a public issue of shares to finance expansion and R&D. It claimed amortisation of the share‑issue expenses under Section 35D (formerly Section 350) of the Income Tax Act, 1961, for ten years at one‑tenth each, and also claimed dedu…

The Supreme Court examined whether incentive subsidies received by Ponni Sugars & Chemicals Ltd. under various government schemes were capital or revenue receipts, whether the company could claim exemption under Section 80P(2)(a)(i) for interest earned from cooperative society members, and whether area development fund…

The Commissioner of Income Tax sanctioned prosecution of Mis. Velliappa Textiles Ltd., a company, and its managing director under Sections 276C, 277 and 278B of the Income Tax Act for alleged false claims of depreciation. The company challenged the sanction on the ground that no opportunity of hearing was given, violat…

Coromandel Indag Products Ltd. entered into a sale agreement with Garuda Chit & Trading Co. to purchase a property for Rs. 82 lakhs, paying an advance and subsequent installments while the vendor was to furnish title documents and an income‑tax clearance. The vendor supplied the tax clearance but failed to provide a so…

Hindustan Coca Cola Beverage Pvt. Ltd. paid warehouse charges to Pradeep Oil Corporation (POC) on which tax was deducted at source under Section 194C at 2%. The Assessing Officer held the company an 'assessee in default' for short deduction of tax, levying interest under Section 201(1A). The Tribunal and High Court uph…

The tenant J. Jermons stopped paying rent to his landlord after a Tax Recovery Officer issued a prohibitory order under the Income Tax Act, directing him to pay the rent to the tax authority instead. He later complied with a notice under Section 226(3) of the Income Tax Act and paid the rent for the entire period to th…

Mis Dalmia Cement, a public limited company, filed loss returns for assessment years 1952‑53 to 1954‑55 after the prescribed time. The Income Tax Officer refused to take cognizance of those returns, stating that no assessment could be made. For later years (1955‑56 to 1959‑60) losses were assessed, and for 1960‑61 the …

The assessee (Ghanshyam HUF) received enhanced compensation and interest from the Haryana Urban Development Authority for land acquired under the Land Acquisition Act, 1894, but omitted these amounts from its 1999-2000 return, arguing that they were in dispute in a pending appeal by the State. The Assessing Officer, CI…

Udaipur Sahakari Upbhokta Thok Bhandar Ltd., a cooperative society dealing in both non‑controlled and government‑authorised controlled commodities, claimed a deduction under Section 80P(2)(e) of the Income‑Tax Act for commissions received for storing foodgrains under the Rajasthan Foodgrains Order. The Assessing Office…

The R.B. Shreeram Religious and Charitable Trust, a registered public trust, received voluntary contributions of Rs 4,55,000 during AY 1966‑67 and used the amount to repay a loan to a mining firm, rather than applying it solely to charitable or religious purposes. The Income‑Tax Officer added the contributions to the t…

The Supreme Court examined whether the State of Karnataka and its universities could increase the admission capacity of medical colleges despite the provisions of Sections I0A, I0B and I0C of the Indian Medical Council Act, 1956 (as amended in 1993). The Court held that the Medical Council of India, under the Central A…

The appellants, owners of rubber estates, sold old, unyielding rubber trees during the assessment years 1968-69 to 1978-79. The Income Tax Officer treated the difference between the sale price and the notional price fixed under Section 55(2) of the Income Tax Act as capital gains and also taxed the replantation subsidy…

Sri Krishna Pvt. Ltd. claimed large unsecured hundi loans in its return for AY 1959‑60. In the assessment of the subsequent year (AY 1960‑61) the Income Tax Officer discovered that many of those loans were bogus and that the alleged lenders were near relatives of the company’s directors. Relying on this, the Officer is…

Smt. Kusum Lata Singhal, a tobacco stockist, challenged the seizure of her books and jewellery after a search under Section 132 of the Income Tax Act was deemed unauthorized. Her husband, R.K. Singhal, was simultaneously prosecuted under Section 132(5) and claimed the jewellery belonged to him as undisclosed income. Th…

Patnaik & Co., an automobile dealer, claimed a loss of Rs.53,650 on the sale of its subscription to the Orissa Government Loan 1972, arguing it was a revenue loss deductible against future profits. The Income Tax Officer treated it as a capital loss, but the Income Tax Appellate Tribunal held it was a business loss bec…

Madnani Development Corp., a contractor, bought two parcels of land to obtain earth for a railway construction contract and later sold the land at a loss of Rs.45,241. The company treated the loss as a revenue expense (cost of earth) and claimed a deduction of Rs.30,045 for the assessment year 1966-67. The Income‑Tax O…

Anchor Pressings Ltd. was assessed to income‑tax for AY 1963‑64 without claiming the rebate under s.84 of the Income‑Tax Act. After the assessment, the company applied under s.154 for rectification of the order to obtain the s.84 relief, but the Income‑Tax Officer and the Commissioner rejected the application. The comp…

Rangi Lal and his son Chander Sen formed a Hindu undivided family (HUF) that later underwent a partial partition, after which Rangi Lal died leaving a credit balance in the firm’s books. Chander Sen, who had his own HUF with his sons, claimed that the balance and its interest were his individual inheritance and exclude…

The appellant, a common carrier, was assessed under Section 69A of the Income Tax Act for short delivery of bitumen, with the assessing officer deeming the bitumen as an "other valuable article" owned by the appellant. The Supreme Court examined whether a carrier can be considered the owner of goods for tax purposes an…

Janatha Textiles, a partnership firm with four partners, was in arrears of income‑tax for several assessment years. The tax department attached agricultural land owned by the partners and sold it by public auction on 5 August 1996 under the procedures of the Second Schedule of the Income Tax Act, 1961. The sale was con…

The Commissioner of Income Tax appealed a decision of the High Court that had dismissed the appeal against an addition of Rs.1,70,94,000 made under section 148 of the Income Tax Act. The Supreme Court examined whether the High Court complied with the mandatory procedure of section 260-A, which requires the court to fra…

The late Maharaja Vikramsinhji of Gondal created several foreign trusts in the United States and the United Kingdom. After his death, the Income Tax and Wealth Tax authorities assessed tax on the income of the UK trusts, arguing that they were specific trusts whose income accrued to the settlor and later to his son. Th…

The appellants, owners of fish seed farms engaged in pisciculture, claimed that the Tamil Nadu government’s 1990 notification granting free low‑tension electricity to "agriculture" also covered their fish‑farming activities. The respondents, Tamil Nadu Electricity Board, denied the claim, holding that pisciculture is n…

The Commissioner of Income Tax appealed against the order of the Income Tax Appellate Tribunal that set aside the acquisition of a plot by the competent authority, on the ground that notices under Section 269D(2) of the Income Tax Act, 1961 were served on the transferor and transferee before the notice under Section 26…

Dalmia Cement Ltd., owner of two cement factories in Pakistan, entered into a sale agreement on 24 July 1962 and a supplemental agreement on 2 November 1962 that stipulated profits and losses from the factories after 30 September 1962 would be credited to the buyer, Mr. Maneckji. The actual transfer of assets occurred …

The assessees, Smith Kline and French (India) Ltd., claimed a deduction for a surtax liability of Rs. 76,777 under the Companies Profits (Surtax) Act, 1964 while computing their total income for AY 1976-77. The Income Tax Officer disallowed the deduction based on Section 40(a)(ii) of the Income‑Tax Act, which bars any …

The Queen's Educational Society, established solely to impart education, claimed exemption under Section 10(23C)(iiiad) of the Income Tax Act for assessment years 2000-01 and 2001-02 despite showing a surplus. The Assessing Officer denied the exemption, the ITAT allowed it, but the Uttarakhand High Court set aside the …

During the assessment year 1997-98 Gufic Chem Ltd. received Rs. 50 lakh as a non‑competition fee under an agreement that prohibited it from carrying on its pharmaceutical business for 20 years. The Assessing Officer treated the amount as a capital receipt, a view upheld by the Commissioner of Income Tax (Appeals) and t…

The petitioners, Group‑A Income‑Tax officers promoted from Group‑B, challenged the 1973 Seniority Rules and the accompanying seniority list, alleging that the rules were based on a mistaken finding that promotions exceeded the statutory quota and that the classification of officers into Group‑A and Group‑B violated Art…

The appellant vendors entered into an agreement to sell land to the respondent purchaser in 1986, with a clause requiring the vendors to obtain a no‑objection certificate and an income‑tax clearance certificate before execution. The purchaser paid an advance but failed to deposit the balance consideration, and the vend…

The appeal concerned whether depreciation for computing book profit under Section 115J of the Income Tax Act should be allowed as per Rule 5 of the Income Tax Rules, 1962, rather than Schedule XIV of the Companies Act, 1956. The assessee, a private limited company, had claimed depreciation under the Rules, but the Asse…

The appellants, partners of a firm, filed their income‑tax return for AY 1988‑89 on 20‑Mar‑1991, well after the statutory due date of 31‑Jul‑1988, and were later prosecuted under Section 276‑CC of the Income Tax Act, 1961. They contended that filing the return under Section 139(4) before the assessment was completed am…

The trustees of H.E.H. The Nizam's Supplemental Family Trust filed a return for AY 1962‑63 in 1964 together with a Section 237 refund claim for tax deducted at source. The Income‑Tax Officer neither granted the refund nor communicated any final decision, but later recorded a note on 10‑Nov‑1965 stating that credit for …

The appellants purchased immovable property for Rs.2.45 lakh and were subjected to acquisition proceedings under Section 269‑D of the Income Tax Act. While the appeal was pending before the Income Tax Appellate Tribunal and subsequently the High Court, the Central Board of Direct Taxes issued Circular No. 455 (16‑Sept‑…

The Supreme Court examined the validity and mandatory nature of Rule 1‑D of the Wealth Tax Rules, which prescribes a break‑up formula for valuing unquoted equity shares of companies (excluding investment and managing‑agency companies). It held that the rule is a perfectly valid piece of delegated legislation and must b…

The Supreme Court, hearing Justice K.S. Puttaswamy (Retd.) v. Union of India (Writ Petition No. 494 of 2012), considered interim orders that limited the use of Aadhaar to six government schemes and made its linkage voluntary pending a final decision. The petitioners argued that the Union could not make Aadhaar mandator…

M/s Sundaram Spinning Mills, a manufacturer of cotton yarn, claimed a higher rate of initial depreciation on its plant and machinery under the Income Tax Act, 1961, arguing that yarn falls within Item No. 21 of the Ninth Schedule, which lists "textiles (including ... cotton yarn, hosiery and rope)". The Assessing Autho…

The appellants were a partnership firm (Juggi Lal Kamlapat Bankers) and a partner who was also the Karta of a Hindu Undivided Family (HUF). The HUF was assessed to wealth tax, and the assessment included the HUF's interest in the partnership firm. The Wealth‑Tax Officer, believing the book values of the firm’s building…

The assessee, a Hindu Undivided Family, was searched under Section 132 of the Income‑Tax Act and unaccounted money, gold and documents were seized. The assessing officer made a provisional assessment under Section 132(5) and later the regular assessment incorporated additions based on a presumption that the seized asse…

The Supreme Court examined whether commissions payable to managing directors of Sarangpur Mills, which were used to purchase deferred annuity policies, should be treated as taxable salary under Section 17 of the Income Tax Act, 1961. The Board of Directors had passed resolutions directing that the commissions be expend…

The Radhasoami Satsang, a religious institution, had its income assessed as taxable for several years after an earlier period of exemption, prompting the assessee to challenge the assessments before the Income‑Tax Tribunal, which held that the income was exempt under sections 11 and 12 of the Income‑Tax Act, 1961. The …

The Income Tax Department seized the books of account and documents of Oriental Rubber Works under section 132(1) of the Income Tax Act, 1961 and retained them beyond the statutory period of 180 days. The assessee contended that the Revenue failed to communicate the Commissioner’s approval and the recorded reasons for …

The Delhi High Court had restrained the Union of India from proceeding against Gautam Khatian under Section 55 of the Black Money Act, holding that the Act’s penal provisions were retrospectively applicable from 1 July 2015. The Supreme Court examined whether the Central Government, while exercising powers under Sectio…

The Supreme Court examined the claims of M/s. Mangalore Ganesh Beedi Works (the assessee) for deductions under the Income‑Tax Act. It held that legal expenses incurred after the business was taken over by an Association of Persons were incurred for protecting the going‑concern and therefore deductible under section 37.…

The assessee, a cotton textile manufacturer, paid amounts to the Textile Commissioner under Clause 21‑C(1)(b) of the Cotton Textiles (Control) Order, 1948, in lieu of producing the minimum required cloth, and also paid a sum for non‑fulfilment of an export obligation under a bond. The assessee claimed these payments as…

The Managing Director of R.K.V. Motors & Timber Ltd withdrew sums which the Income Tax Officer treated as dividend under section 2(6A)(e) of the Income Tax Act, 1922. The dispute centered on whether "accumulated profits" for dividend liability includes the company's current year profits and whether tax and dividend pro…

The case concerned M/s Krishak Bharati Cooperative Ltd., a multi‑state cooperative society in India, which held a 25% share in an Omani joint‑venture (OMIFCO) and earned dividend income from it. The dividend was exempt from tax in Oman under Article 8(bis) of the Omani Company Income Tax Law and a clarification letter …

The case concerned a block assessment of undisclosed income for the period 01‑04‑1989 to 10‑02‑2000, where the Assessing Officer failed to levy surcharge under Section 113 of the Income‑Tax Act. The Commissioner of Income Tax sought to levy surcharge retrospectively, relying on a proviso inserted in Section 113 by the …

The Saurashtra Kutch Stock Exchange Ltd., a charitable institution, claimed exemption from income tax under Section 11 of the Income Tax Act, 1961, but its claim was rejected by the Assessing Officer, the Commissioner of Income Tax (Appeals), and the Income Tax Appellate Tribunal (ITAT). The ITAT later filed a miscella…

The appellants, employees of Tata Iron & Steel Co., challenged the amendment to Rule 3 of the Income Tax Rules, 1962 which altered the method of valuing perquisites for rent‑free accommodation. They argued that the amendment was arbitrary, violated Article 14 of the Constitution and was inconsistent with Section 17(2)(…

Modi Industries Ltd. challenged the assessment officer’s order that interest on excess advance tax should be payable only up to the date of the original (first) assessment and only on the excess amount determined in that assessment. The Supreme Court examined the meaning of "regular assessment" in Section 214 of the In…

The appellants, promoter‑directors of a listed finance company, were found to have purchased shares in violation of SEBI's insider‑trading regulations and were penalised by an SEBI Adjudicating Officer on 28‑08‑2014. The penalty orders required payment within 45 days and were affirmed by the Supreme Court in 2019, afte…

The assessees, Kerala Estate Mooriad Chalapuram, claimed a deduction of Rs.33,747.09 as interest on a loan under section 5 of the Kerala Agricultural Income Tax Act, 1950, which was allowed. In the subsequent year, the creditor waived the interest, and the amount was credited to the assessees' revenue accounts. The ass…

Canara Workshops Ltd., a company engaged in automobile ancillaries, also commenced an alloy‑steel manufacturing unit, both of which are listed as priority industries under the Fifth Schedule of the Income Tax Act, 1961. The company claimed an 8% deduction under section 80E (then s. SOE) on the profits from its automobi…

Seshasayee Paper & Boards Ltd. filed its 1991-92 return showing nil income, claiming set‑off of unabsorbed investment allowance but not of unabsorbed depreciation from earlier years. The assessing officer, relying on Section 32 of the Income Tax Act, allowed the unabsorbed depreciation first, arguing that it must be se…

The Supreme Court considered whether the amendment inserting clause (d) into Section 80IB(10) of the Income Tax Act, effective from 1 April 2005, which limits the built‑up area of shops and commercial establishments in housing projects, applies to projects that were approved before 31 March 2005 but completed after the…

The assessees received large cash credits from a foreign donor and claimed them to be gifts. The Assessing Officer rejected this explanation, treating the amounts as income under Section 68 of the Income Tax Act, 1961. The Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal upheld this assessment…

The R.B.A.N.M.S. Educational Institution, a charitable trust in possession of a Bangalore property since 1905, was sued by respondents who claimed a right to prevent the institution from alienating the land based on an alleged 2018 agreement to sell and an advance cash payment of Rs.75 lakh. The institution filed an ap…

Vijaya Bank claimed deductions under Section 36(1)(vii) of the Income Tax Act, 1961 for bad debts in the assessment years 1993‑94 and 1994‑95. The bank had created a provision, debited the profit and loss account and simultaneously reduced the Loans and Advances/ Debtors on the balance sheet, but it did not close each …

The appellant, Sterling Foods, a firm engaged in processing and exporting seafood, earned import entitlements under a government export promotion scheme and sold them, including the sale proceeds in its total income. It claimed a deduction under Section 80HH of the Income Tax Act, 1961, arguing that the proceeds were p…

The Federation of Indian Chambers of Commerce & Industry, a company registered under the Companies Act, claimed that its entire income for the year ended 31‑December‑1961 was exempt under section 11(1)(a) read with section 2(15) of the Income‑Tax Act, arguing that its activities – holding a trade fair and sponsoring an…

The Income Tax Department appealed against a High Court order that dismissed its challenge to the applicability of Section 35-D of the Income Tax Act, 1961 to Yes Bank Ltd. The core issue was whether Yes Bank, as an industrial undertaking, could claim the deduction under Section 35-D for the assessment year 2007-2008. …

Oil and Natural Gas Corporation Ltd., a public sector undertaking, had borrowed foreign loans for revenue and capital purposes and revalued these loans in Indian rupees at each balance‑sheet date. It claimed the foreign‑exchange loss on revenue‑account loans as a deduction under Section 37(1) and sought to increase the…

The Agasthy ar Trust, a charitable trust recognized under the Income Tax Act in 1977, sought exemption from urban land tax for land held between 1965 and 1976 under the Tamil Nadu Urban Land Tax Act, 1966. The trust relied on earlier Government Orders (1976) that granted total exemption to charitable institutions, argu…

Mahendra Mills, a company, did not claim depreciation in its return for the assessment year 1974-75 and also failed to furnish the prescribed particulars under Section 34 of the Income‑Tax Act. The Income‑Tax Officer nevertheless allowed a depreciation deduction, which was set aside by the Commissioner of Income Tax (A…

The Supreme Court of India struck down the Electoral Bond Scheme and related amendments to the Finance Act 2017, which had introduced anonymous financial contributions to political parties. The Court held that the scheme violated the right to information of voters under Article 19(1)(a) of the Constitution, as informat…

The Bombay Burmah Trading Corporation, an Indian resident company engaged in tea export, claimed a weighted deduction under Section 35‑B of the Income‑Tax Act for Rs 1,95,935 spent on exporting tea from East Africa to the United Kingdom. The Income‑Tax Officer disallowed the claim on the ground that Section 35‑B applie…

Jyoti Ltd., a Baroda‑based company, claimed that its reserves for doubtful debts (Rs 85,000) and gratuity (Rs 5,60,000) should be treated as part of its capital base for computing statutory deduction under the Companies (Profits) Surtax Act, 1964. The Surtax Officer excluded the amounts; the Appellate Assistant Commiss…

The Supreme Court considered whether, for assessment year 1962-63 and later, the actual cost of service line assets acquired before the previous year must be recomputed under Section 43(6) of the Income‑Tax Act, 1961. The appellants, several electric supply companies, argued that the actual cost determined under the ea…

Somasundram Chetir & Co., a cloth merchant, incurred losses of Rs.2,04,746 and Rs.17,000 in the assessment years 1960-61 and 1961-62 which the Assessing Officer treated as losses from speculative transactions, allowing set‑off only against speculative profits. The Tribunal held that the losses arose from hedging contra…

Continental Construction Ltd., a civil engineering firm, entered into several overseas construction contracts, notably the Karkh Water Supply project in Iraq, and sought deductions under Section 80‑0 of the Income‑Tax Act for payments received as royalties, fees or similar. The Central Board of Direct Taxes (CBDT) appr…

Grindlays Bank, a UK‑incorporated banking company operating in India, filed its income‑tax return for AY 1972‑73. The Income‑Tax Officer issued a notice under s.142(1) demanding documents, which the bank contested before the Calcutta High Court under Art.226. The High Court, after a series of stays, directed the bank t…

The Commissioner of Income Tax appealed against the High Court’s order upholding the Tribunal’s view that investment allowance under Section 32A of the Income Tax Act could be claimed in more than one assessment year, based on Section 43A(1). The assessing officer argued that the allowance should be allowed only in the…

S.A. Builders Ltd borrowed funds from banks and advanced a portion of those funds interest‑free to its subsidiary, M/s SAB Credits Ltd. The Assessing Officer disallowed the interest paid on the borrowed funds, holding that the advance to the sister concern was not for the assessee’s own business. The CIT(A) partially a…

S.A. Builders Ltd., a company engaged in civil construction, claimed a deduction under Section 32AB of the Income Tax Act, 1961. The Income Tax Appellate Tribunal rejected the claim on two grounds: the company was not carrying on any manufacturing activity and the deduction was subject to conditions that were not shown…

Mis. Kachwala Gems, a dealer in precious stones, was assessed under the Income Tax Act after the Assessing Officer found serious deficiencies in its books of accounts, including lack of stock registers and unverified purchase entries amounting to about Rs. 42 lakh. The AO rejected the books, invoked Section 144 for a b…

The assessee, a shareholder of Kasthuri Estates Pvt. Ltd., received cash and property when the company reduced its share capital from Rs 1,000 to Rs 210 per share. Earlier advances to shareholders had been treated as deemed dividends under Section 2(22)(e) of the Income‑Tax Act. The Tribunal held that no capital gains …

The case concerned whether the additional amount ("Supplementary Commission") earned by travel agents over and above the standard 7% commission on airline tickets is covered by Section 194H of the Income Tax Act and thus subject to tax deduction at source (TDS). The Supreme Court examined the nature of the relationship…

The Vivekanand School challenged a tax demand made by the Zila Panchayat under Section 121 of the Uttar Pradesh and Uttaranchal (Kshetra Panchayat and Zila Panchayat) Adhiniyam, 1961, on the ground that the fees collected from students were being treated as taxable income. The school argued that it was not a commercial…

The Kerala State Co‑operative Agricultural and Rural Development Bank Ltd. (KSCARDB) claimed a deduction under s.80P(2)(a)(i) of the Income Tax Act for profits earned by providing credit facilities to its member co‑operative societies. The Assessing Officer held that KSCARDB was a "co‑operative bank" within the meaning…

The assessee purchased land for Rs 4.10 lakhs, but during a raid the tax department seized notes suggesting a higher consideration and recorded contradictory statements from the seller indicating amounts of Rs 34.35 lakhs, Rs 4.10 lakhs and Rs 4.85 lakhs. The Assessing Officer accepted the higher figure of Rs 34.85 lak…

The Supreme Court examined whether a government cash subsidy, granted as a percentage of an industrial asset's capital cost, could be deducted from the "actual cost" of the asset under Section 43(1) of the Income‑Tax Act, 1961 for the purpose of computing depreciation under Section 32. The Court noted a split among Hig…

The appellants owned a 30,885‑sq‑yd plot registered as agricultural land but located within municipal limits. They obtained permission under Section 63 of the Bombay Tenancy and Agricultural Lands Act to sell the land for non‑agricultural use and sold it to a housing cooperative in May 1969. The Income‑Tax authorities …

Shriyans Prasad Jain, a former officer of Dalmia Cement & Paper Marketing Co., was paid Rs 7 lakhs on termination of his services and claimed the sum was compensation for loss of employment, exempt under section 7 of the Income‑Tax Act, 1922. The assessment tribunal, High Court and the Supreme Court initially held the …

The respondent, a member of a Hindu Undivided Family (HUF), claimed that a partition agreement dated 3 July 1958 and a subsequent civil court decree had dissolved the HUF, so that the family could not be taxed as a HUF for assessment years 1967-68, 1968-69 and 1969-70. The Income Tax Officer rejected the claim, holding…

The appellant, Kesari Nandan Mobile, challenged two provisional attachment orders dated 13 November 2024 and 18 December 2024 issued by the Assistant Commissioner of State Tax under section 83 of the Central Goods and Services Tax (CGST) Act. The orders were issued after earlier attachment orders of October 2023 had au…

The assessee, Karam Chand Thapar & others, acted as a del credere agent for coal collieries and as an agent for coal purchasers. It claimed "under‑charges" from collieries for freight overcharges on under‑loaded wagons, received the amounts before any purchaser claim, and paid purchasers when they demanded reimbursemen…

Vania Silk Mills Ltd. purchased machinery in 1957 and hired it to Jasmine Mills, which insured the machinery. A fire in 1966 destroyed the machinery; the insurer paid the lendee, which in turn paid the appellant Rs 6,32,533 as insurance claim. The assessee treated the excess of the claim over the written‑down value as …

The Commissioner of Income Tax appealed against a High Court order that allowed M/s Mother India Refrigeration Industries to set off unabsorbed business losses before deducting the current year's depreciation for the assessment years 1951-52 and 1952-53. The issue was whether, under the Income Tax Acts of 1922 and 1961…

The appellant, Kapoor Chand (deceased), had two trusts created for his minor children, Priti Life Trust and Anuj Family Trust. The trustees, who were also partners in a partnership firm, received the firm's profits, but the trust deeds stipulated that the income could not be distributed to the children until they attai…

Joshi Technologies International Inc. entered into two Production Sharing Contracts (PSCs) with the Union of India in 1995 for oil fields, but the contracts omitted any clause providing for deductions under Section 42 of the Income Tax Act, 1961. The Income Tax Authorities initially allowed such deductions based on an …

The petitioners, TDM Infrastructure Pvt. Ltd., sought appointment of a sole arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996, contending that the arbitration agreement was an international commercial arbitration because the company's central management and control were exercised in Malaysia. Th…

The ex‑Ruler of the former Holkar State sold two pieces of heirloom jewellery in the assessment year 1972‑73 and claimed that the proceeds were not taxable because the jewellery were "personal effects" within the meaning of Section 2(14) of the Income‑Tax Act, 1961. The Tribunal rejected this contention, but the Madhya…

Shah Sadiq & Sons, a partnership firm registered under the Income Tax Act, incurred speculation losses of Rs 60,054 in AY 1960‑61 and Rs 6,839 in AY 1961‑62 and claimed to set them off against a profit of Rs 58,102 in AY 1962‑63. The Income‑Tax Officer rejected the claim, holding that, for a registered firm, losses cou…

The Supreme Court considered a dispute arising out of a corporate insolvency resolution process involving Avani Towers (the corporate debtor), Energy Properties (the ostensible owner of a 10.19‑acre land), and Victory Iron Works (a licensee of a 10,000 sq ft portion). The corporate debtor had financed the purchase of t…

The Supreme Court examined the constitutional validity of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (as amended) after the Delhi High Court had struck it down as violative of Article 14 and as eroding judicial independence. The Court held that Parliament has the competence to enact the Act…

Travancore Rubber and Tea Co. entered into three agreements to sell old rubber trees, receiving Rs 75,000 as earnest money and Rs 3,56,300 as advance. The purchasers defaulted, the agreements were terminated and the amounts were forfeited. The assessee claimed the forfeited sums were capital receipts and not taxable as…

The assessee, K.C. Thapar & Bros. (P) Ltd., claimed deductions for losses incurred on the sale of shares of Bharat Starch & Chemicals Ltd. and Greaves Cotton & Co. Ltd. for AY 1959-60, which the Income‑Tax Officer disallowed on the ground that the transactions were at undervalued prices and were made to a group affilia…

The Bangalore Club, an unincorporated association of persons, claimed exemption from tax on interest earned from fixed deposits placed with its corporate member banks, invoking the doctrine of mutuality under s.2(24)(vii) of the Income‑Tax Act. The assessing officer treated the interest as taxable, but the Commissioner…

The respondent, M/s A.R. Enterprises, was found during a search of another premises to have undisclosed income for AY 1995-96 and had not filed a return by the due date. The Assessing Officer initiated block assessment under Chapter XIV‑B, treating the income as undisclosed despite the assessee having paid advance tax …

M/S I.C.D.S. Ltd., a non‑banking finance company, purchased trucks and leased them to third parties, registering the vehicles in the lessees' names. The company claimed depreciation under Section 32 of the Income Tax Act, 1961 at both the normal and higher rates, arguing it owned the trucks and used them in its leasing…

Indian Tube Co. transferred Rs 90 lakh to a dividend reserve in 1963, of which Rs 76 lakh was paid out as dividend and Rs 14 lakh remained. The issue was whether the transferred amount, or any part of it, should be treated as a reserve for computing the company's capital under the Companies (Profits) Sur‑tax Act, 1964,…

G.P. Volkart Ltd. had obtained municipal approval to construct a 30‑storey building with an FSI of 2.45. After the Bombay Metropolitan Region Development Act, 1974 came into force, the Metropolitan Authority rejected the application within the statutory 60‑day period, prompting the company to appeal to the State Govern…

British Paints India Ltd. valued its stock‑in‑trade at the cost of raw materials only, excluding overheads, claiming that paints have a short shelf‑life. The Assessing Officer added the overheads to the stock value under section 145 of the Income‑Tax Act, increasing tax for 1963‑64 and allowing a deduction for 1964‑65.…

Petron Engineering Construction Pvt. Ltd. entered into agreements with Toyo Engineering India Ltd. to provide technical services for a project of a Japanese firm in Iraq and sought approval under section 80‑0 of the Income‑Tax Act, 1961 for a deduction on royalties received. The Central Board of Direct Taxes rejected t…

The assessee, a cashew processor and exporter, claimed export incentive under s.80HHC(3) for AY 1993-94 but omitted processing charges from the total turnover in the formula. The Supreme Court held that processing charges form part of gross total income and must be included in total turnover for computing the export in…

The Revenue appealed against the Bombay High Court's order upholding the Income Tax Appellate Tribunal's view that interest earned by Ratnakar Bank Ltd. on government securities was not chargeable to tax under Section 2(7) of the Interest Tax Act, 1974. The Supreme Court examined whether such interest falls within the …

The Revenue appealed against the Bombay High Court’s order upholding the Tribunal’s view that interest earned by ICICI Bank on government securities was not taxable under section 2(7) of the Interest Tax Act, 1974. The Supreme Court examined whether the interest in question fell within the definition of "interest charg…

The Commissioner of Income Tax appealed against the Bombay High Court's order upholding the Tribunal's view that interest earned by the Industrial Development Bank of India Ltd. on government securities was not assessable under Section 2(7) of the Interest Tax Act, 1974. The Supreme Court examined whether the interest …

The Supreme Court examined an appeal by the Commissioner of Income Tax challenging the High Court's affirmation that interest earned by City Union Bank on government securities was not assessable under section 2(7) of the Interest Tax Act, 1974. The Tribunal and the High Court had held the interest non‑taxable, relying…

The A.L.N. Rao Charitable Trust claimed exemption for a surplus of Rs.85,262 under Section 11(1)(a) and Section 11(2) of the Income Tax Act, 1961. The Assessing Authority initially allowed the exemption on the basis that the Trust had invested 75% of the surplus in approved securities, but the Commissioner later issued…

The appellants, employees of Coal India Ltd., received gratuity under a 2008 Government office memorandum that raised the ceiling to Rs 10 lakhs effective from 1 January 2007. They challenged the tax deducted at source, arguing that the Payment of Gratuity (Amendment) Act, 2010, which officially raised the ceiling to R…

The assessee, Laxman Das Khandelwal, a broker, was subjected to a search and seizure and subsequently assessed under Section 143(3) of the Income Tax Act, 1961 with large additions. He appealed, and the Revenue filed a cross‑objection alleging that no notice under Section 143(2) had been issued, rendering the reassessm…

M/s S.G. Asia Holdings (India) Pvt. Ltd. received brokerage from its parent company at a rate of 0.05%, which the Assessing Officer (AO) deemed lower than market rates and made a transfer pricing addition of Rs.2,89,82,746 under Section 92 of the Income Tax Act. The AO did not refer the matter to a Transfer Pricing Off…

A Hindu undivided family transferred its business to a partnership firm, which debited construction costs to the accounts of the four co‑owners. The partnership firm appealed assessments that added concealed income, and the Appellate Assistant Commissioner held that the firm was not the owner of the properties, deletin…

The appellant, the Principal Director of Income Tax (Investigation), sought to validate a search and seizure warrant issued under Section 132 of the Income Tax Act, 1961 against Laljibhai Kanjibhai Mandalia, who had transferred Rs 10 crore as a loan to a newly formed company and later repaid it with interest. The High …

The assessee firm claimed a cash loan of Rs 50,000 from a Calcutta company and claimed interest deductions for several years. The Income‑Tax Officer (ITO) in Azamgarh, after receiving a specific letter from the ITO in Calcutta stating that the Calcutta company was merely a name‑lender and had not advanced any money, fo…

The Revenue sought to levy block assessments for AY 2004-05 to 2009-10 after conducting a search of M/s Spacewood Furnishers Pvt. Ltd. under Section 132 of the Income Tax Act. The High Court of Delhi set aside the warrant of authorization, holding that the satisfaction notes were inadequate and possibly manipulated, an…

Oil and Natural Gas Corporation (ONGC) entered into a drilling contract with Atwood Oceanic International containing clauses on tax liability and changes in law. The Government of India issued a 1983 notification extending the Income Tax Act to offshore areas, causing Atwood to pay tax on its expatriate employees for a…

Harendra Mehta and his family (appellants) and Mukesh Mehta and his family (respondents) were brothers who owned businesses and properties in India and the United States. They executed an arbitration agreement appointing their elder brother as arbitrator to divide the assets, and the arbitrator rendered an award in New…

UCO Bank had credited interest on loans whose repayment was doubtful to a suspense account and, following CBDT Circular No. F 201/21/84 TTA‑11 dated 9 Oct 1984, excluded that interest from its total income for AY 1981‑82. The Commissioner of Income Tax re‑included the amount, but the ITAT and the Calcutta High Court al…

The Supreme Court examined the interpretation of Section 11 of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992, which governs the discharge of liabilities and distribution of attached property of notified persons such as Harshad Mehta. It held that only taxes finally assessed for …

The Kerala State Cooperative Marketing Federation Ltd., an apex cooperative society, claimed a deduction under Section 80‑P(2)(a)(iii) of the Income Tax Act, 1961 for profits earned from marketing cashew nuts purchased from its member societies. The Income Tax Officer rejected the claim, and the matter progressed throu…

Aspinwall & Co. Ltd. amalgamated with Pullangode Rubber & Produce Co. Ltd., with the scheme approved in 2006 and the appointed date set as 01‑01‑2006. The appellant sought to set off the accumulated losses of the amalgamating company against its own income under the Kerala Agricultural Income Tax Act, 1991, relying on …

The Supreme Court considered whether the term "loss" in clause (b) of the proviso to Section 205(1) of the Companies Act, 1956, as incorporated into Section 115‑J of the Income‑Tax Act, 1961, includes depreciation. The assessees, including Mis. Surana Steels Pvt. Ltd. and V.V. Trans‑Investments (P) Ltd., argued that lo…

The Commissioner of Income Tax appealed against a judgment allowing Mis Cynamid India Ltd. to claim deductions under Sections 35B and 35C of the Income‑Tax Act for expenses incurred in distributing agricultural literature and for export promotion. The assessee uses rice husk, obtained by de‑husking paddy, as the princi…

The assessee, a private limited company, paid cash commissions on sales to its directors in addition to their salaries. The Income Tax Officer treated these commissions as perquisites and disallowed them under section 40(a)(v) of the Income‑Tax Act for AY 1971‑72 and under section 40(A)(5) for AY 1972‑73. The Appellate…

Mis Synco Industries Ltd., a company with oil and chemical divisions, earned profits in 1990‑91 and 1991‑92 but had earlier losses in its oil division. It claimed deductions under Sections 80HH, 80I and 80‑1 of the Income‑Tax Act, arguing that each unit should be treated separately and that the earlier oil losses shoul…

The case concerned a notification under Section 4(1) of the Land Acquisition Act, 1894 issued before the 1984 amendment, under which a declaration under Section 6(1) was made within the three‑year period but later quashed by the High Court. The State then issued a fresh declaration and the appellants challenged its val…

The Revenue appealed a Gujarat High Court order that quashed a pre‑emptive purchase notice issued under Chapter XX‑C of the Income‑Tax Act. The respondents, co‑owners of an immovable property in Ahmedabad, had agreed to sell the whole property for Rs 47 lakhs, which exceeded the Rule 48‑K limit of Rs 25 lakhs for the a…

The State Bank of Patiala had, in several assessment years, transferred sums to a "bad and doubtful debts" account and claimed that these amounts were "reserves" under the Companies (Profits) Surtax Act, 1964, thereby eligible for statutory deduction. The Income Tax Officer rejected the claim, but the Income Tax Appell…

The deceased B.N. Singh had not filed income‑tax returns for three assessment years and died leaving ten legal representatives. His eldest son, Jai Prakash Singh, filed the returns and the Income Tax Officer issued notices under sections 142(1) and 143(2) only to him, not to the other nine representatives, and proceede…

The Hindu Undivided Family Onkar Saran & Sons filed returns for assessment years 1961-62 and 1962-63 that omitted capital gains from land sales. The Income‑Tax Officer, after discovering the omission, issued notices under s.148 in 1965 and the assessee filed revised returns in 1969, still concealing the income. Re‑asse…

M/s Tomorrowland Limited, the highest bidder for a 5‑star hotel site, paid the first instalment but argued that HUDCO (Housing and Urban Development Corporation) was obliged to obtain statutory approvals and execute a sub‑lease before demanding further payments. HUDCO failed to secure the necessary approvals and a perp…

The assessee, Duncan Brothers & Co. Ltd., claimed that provisions it made for income‑tax liability (Rs 16,48,888 for AY 1963‑64 and Rs 17,52,920 for AY 1964‑65) could either be treated as part of its capital or be deducted from the cost of excluded investments under the Super Profits Tax Act, 1963 and the Companies (Pr…

The Supreme Court examined the validity of Sections 44AC and 206C of the Income‑Tax Act, 1961, which allow tax to be levied on a presumptive basis on traders of specified goods. Petitioners argued that the provisions were ultra‑vio​les, beyond Parliament’s competence under Schedule VII, Entry 82, and violated Articles …

The Commissioner of Income Tax, Kerala appealed against the Kerala High Court's decision in favor of Kilkottagiri Tea and Coffee Estate Co. Ltd., which allowed the company to claim a development allowance for unclaimed expenses incurred in clearing land and planting tea bushes during 1966-67 and 1967-68. The dispute ce…

The petitioners, old Indian settlers of Sikkim, challenged the definition of “Sikkimese” in Section 10(26AAA) of the Income Tax Act, 1961 and the proviso that excluded a Sikkimese woman who married a non‑Sikkimese after 1 April 2008 from the tax exemption. They argued that the exclusion of settlers whose names were not…

The case arose from a search under Section 132 of the Income Tax Act on the Khoday Group, where the appellant K.L. Swamy, a director, was served a notice under Section 158BD to file a return for the block period. He filed the return late, and the Assessing Officer levied interest under Section 158BFA(1) and surcharge u…

Oracle Software India Ltd. imported master media containing application software and commercially duplicated it onto blank compact discs (CDs) to sell as software kits. The Income Tax Department denied the company a deduction under Section 801A of the Income Tax Act, arguing that the duplication process did not amount …

The Commissioner of Income‑Tax appealed against a High Court order that had directed the revenue to pay interest under Section 244(1) of the Income‑Tax Act to Chittor Electric Supply Corporation, which had received a refund after a fresh assessment was made in 1973. The original assessment of 1966 was set aside by an A…

The appellants were liable to penalty under Section 18(1) of the Wealth Tax Act, 1957 for failing to file wealth‑tax returns for assessment years 1970‑71 to 1975‑76. After the amendment inserting Section 18‑B, they filed the returns and sought a full waiver of the penalty. The Commissioner, satisfied that the condition…

The case concerned Williamson Financial Services, which earned composite income from growing, manufacturing and exporting tea. The assessee claimed a deduction under s.80HHC of the Income‑Tax Act on the entire tea income before applying the 60:40 apportionment mandated by Rule 8(1) of the Income‑Tax Rules, 1962. The As…