Income Tax Act, 1961

The Union of India, as the revenue authority, demanded advance tax from the U.P. State Ware Housing Corporation for the assessment year 1974-75, contending that the corporation's rental income from its godowns and warehouses was not exempt under Section 10(29) of the Income Tax Act, 1961. The corporation, created under…

The appellant, formerly Bank of Cochin Ltd., purchased foreign‑currency negotiable instruments as part of its banking business and later realised the proceeds in foreign banks. When the Indian rupee was devalued on 6 June 1966, the rupee value of these foreign‑exchange assets increased by Rs 4,65,515. The Income‑Tax Of…

The appellants, a husband‑wife duo, were searched under the Income Tax Act at their residences in Bhopal and Aurangabad. During the search they denied possessing a safe‑deposit locker, which was later discovered at Aurangabad, leading the Deputy Director of Income Tax (Investigation) Bhopal to lodge a complaint under C…

The State of Kerala issued a notification to declare certain lands as revenue forest, which the appellant's predecessor claimed title to. The Forest Settlement Officer rejected the claim, but the Additional District Judge allowed it on appeal under Section 11 of the Kerala Forest Act. The State appealed to the High Cou…

Liberty India, a partnership firm operating a small‑scale industrial undertaking, claimed a deduction under s.80‑18 of the Income‑Tax Act for profits arising from Duty Entitlement Passbook (DEP8) and duty‑drawback credits that were posted to its profit and loss account. The Assessing Officer rejected the claim, holding…

The Indian and Eastern Newspaper Society, a registered society that owned a building with a hall and rooms let out for rent, had its income from these facilities assessed as business income for the years 1960‑61 to 1963‑64. During a departmental audit, the Income Tax Department’s internal audit unit opined that such re…

Shad! Lal Sugar Mills Ltd. was assessed for the year 1958-59 with additions of Rs 48,500 for cane cost, Rs 67,500 for shortage and Rs 21,700 for out‑station staff salary. The assessee did not contest the assessment but later faced a penalty under s.274 read with s.271 of the Income‑Tax Act, 1961, after admitting that t…

The Supreme Court examined whether various reserves created by Saran Engineering Co. Ltd. could be treated as "standard deductions" under the Super Profits Tax Act, 1963, and thus be included in the computation of capital for the Companies (Profit) Surtax Act, 1964. The reserves in question included capital reserve, st…

The appellant, ArvinDA Paramila Works, a manufacturer of agarbathis, exported its products in AY 1981‑82 and paid commissions to agents located abroad for procuring export orders. It claimed a weighted deduction under Section 35B(l)(b)(iv) of the Income Tax Act, 1961, on the commission expenditure, arguing that the pay…

The Commissioner of Income Tax challenged Amritsar Transport Company Private Limited for including amounts collected as "Dharmada" in a separate account in its business income. The company argued that the levy, collected at Rs.1 per bilty, was a customary charitable contribution distributed among the labourers' poor re…

The respondents, Tiwari and Passi, were prosecuted under Section 276‑B of the Income‑Tax Act for failing to deposit TDS. They applied to the Commissioner for compounding of the offences under Section 279(2). The Central Board of Direct Taxes had issued Instruction No. 1317 under Section 119(1) requiring prior Board app…

Alembic Chemical Works Ltd., a penicillin manufacturer, paid Rs 2,39,625 to Japanese firm Meiji for sub‑cultures, technical know‑how, designs and training to improve yields in its existing plant. The assessee claimed the payment as a revenue expense deductible under Section 37 of the Income‑Tax Act, 1961. The tax autho…

The Servants of People Society, a charitable trust registered under Sections 12AA and 80G, runs schools, a medical centre, an old‑age home and a newspaper printing press. The revenue denied exemption for the society’s income, particularly advertising revenue from its newspaper, invoking the proviso to Section 2(15) of …

The Commissioner of Income Tax (Mumbai) appealed against the Bombay High Court's dismissal of its challenge to the applicability of Rule 8D, which provides a method for computing expenditure under Section 14A of the Income Tax Act. The issue was whether Rule 8D, introduced by the Income‑Tax (Fifth Amendment) Rules, 200…

The respondent, D.P. Sandhu Bros. Chembur (P) Ltd., entered into a 50‑year lease in 1959 and prematurely surrendered its tenancy rights in March 1986, receiving Rs 35 lakhs. The Assessing Officer treated the receipt as income from other sources under Sec. 10(3) read with Sec. 56, while the Commissioner of Income Tax (A…

The Thanthi Trust, created in 1954 to run a Tamil daily newspaper, claimed tax exemption under Section 11 of the Income Tax Act, 1961 for the newspaper's income, arguing that surplus earnings were used for charitable purposes such as education and relief of the poor. The Income Tax Officer disallowed the exemption for …

The Supreme Court examined whether Section 4(1) of the Benami Transactions (Prohibition) Act, 1988 could be applied to suits, claims or actions that were filed before the Act came into force, seeking to enforce rights over benami‑held property. The petitioners argued that the proceedings, initiated under the law then i…

The appellant, an individual processing cashew nuts in ten units (four in Kerala, two owned and two leased), declared a lock‑out of the Kerala units due to labour problems and later settled with trade unions by paying five days' wages per year of service, amounting to Rs 4,18,107. He claimed a deduction for this paymen…

The Supreme Court examined whether mobilisation fees paid to non‑resident oil‑exploration companies under contracts with ONGC constitute "profits and gains" taxable under Section 44BB of the Income Tax Act, 1961. The Court held that such fees fall within clause (a) of Section 44BB(2), are deemed income under Sections 5…

Mak Data Ltd filed its income tax return and was selected for scrutiny. During assessment, the Assessing Officer (AO) discovered documents from a survey of a sister concern and issued a show‑cause notice. The company offered to surrender Rs 40.74 lakhs, claiming it was a voluntary disclosure to avoid litigation. The AO…

Mis J.B. Boda & Co. Pvt. Ltd., a reinsurance broker, received a commission in US dollars after deducting its fee from the gross reinsurance premium it remitted to foreign reinsurers with RBI approval. The company claimed that the retained commission constituted "income received in convertible foreign exchange" under Se…

The appellants, registered firms, filed income‑tax returns after the prescribed time but within the four‑year period allowed under sub‑section (4) of section 139 of the Income‑Tax Act, 1961. The Assessing Officer, invoking that provision and the proviso to sub‑section (1), levied interest on the tax as if the firms wer…

The assessee company had advanced a loan to a firm whose partners were also its shareholders and directors. Interest was charged on the loan in the 1966-67 and 1967-68 assessment years, establishing it as an interest‑bearing loan. For the 1968-69 assessment year the company passed a resolution before the end of its acc…

The Nizam of Hyderabad created a family trust in 1950, dividing the corpus into a Reserve Fund and a Family Trust Expenses Account, each with distinct purposes. The income of these two funds was assessed separately for 1960‑61 and 1961‑62, but the Income‑Tax Officer later reopened the assessments under section 147 of t…

The appellant, Saroj Aggarwal, was the widow of a partner who died in 1959. After his death a new partnership deed was executed, admitting her and an adopted son as partners. The deceased had unabsorbed speculation losses from earlier years. In the assessment year 1962‑63, the appellant claimed to set off those losses …

The British Bank of Middle East, a non‑resident banking company, provided free cars to its employees for the assessment years 1975‑76 and 1976‑77. The assessing officer disallowed the perquisite value of the cars under Section 40A(5) of the Income‑Tax Act, estimating it at 50% of the actual running expenses. The Commis…

Columbia Sportswear Co., a US company with liaison offices in India, sought an advance ruling from the Authority for Advance Rulings (Income Tax) on taxability and permanent establishment issues. The Authority issued a binding ruling, which the company challenged by filing a Special Leave Petition (SLP) under Article 1…

Commonwealth Trust Ltd., a company that had claimed depreciation on its factory buildings, sold those assets after 1 January 1954 and computed capital gains using the option under Section 55(2)(i) to take the fair market value as of that date as the cost of acquisition. The Income Tax Officer and the appellate authorit…

Snowtex Investment Ltd., a non‑banking financial company, incurred a loss from share trading in AY 2008‑09 and sought to set off that loss against profits earned from futures and options trading. The assessing officer treated the share‑trading loss as a speculation loss and disallowed the set‑off, holding that futures …

K. George Thomas, an individual who owned a printing press and a daily newspaper, received Rs.5,85,637 from the United States in his capacity as Vice‑President of the India Gospel Mission. The funds were credited to a bank account in the name of the Mission but were largely used for the newspaper’s operations and Thoma…

Mis Baby Marine Exports, a supporting manufacturer, sold marine products to export houses and received, in addition to the FOB value, a 2.25% export‑house premium. The assessee claimed the premium as part of its export turnover and sought a deduction under Section 80HHC(IA) of the Income‑Tax Act. The Assessing Officer …

The appellant, a partnership firm, owned a house property that was attached and proclaimed for sale under tax recovery proceedings. The property was auctioned in 1980 and a bid was accepted, but the tax demands against the firm were later reduced to nil after successful appeals before the Income Tax Appellate Tribunal.…

Oberoi Hotels (India) Pvt. Ltd. entered into a comprehensive agreement with a Nepalese hotel enterprise to provide technical, professional and other services for operating the hotel. The company sought approval of the agreement under Section 80‑0 of the Income‑Tax Act, 1961, but the Central Board of Direct Taxes (CBDT)…

Coca‑Cola Export Corp., a wholly‑owned non‑resident subsidiary of the Coca‑Cola Company, claimed deductions for pro‑rated home‑office expenses and service charges paid in US dollars. The Income‑Tax Officer (ITO) disallowed portions of these deductions and later issued notices under Section 148 of the Income‑Tax Act to …

Universal Radiators, a manufacturer of automobile radiators, purchased copper ingots from the United States to be rolled in Bombay and used as raw material. While the ingots were at sea, the vessel was seized during hostilities between India and Pakistan and the loss was compensated by the insurer, resulting in a rupee…

The Supreme Court considered appeals by a partnership firm, Sasi Enterprises, and its partners who were prosecuted under section 276CC of the Income Tax Act for willfully failing to file income‑tax returns for the assessment years 1991‑92, 1992‑93 and 1993‑94. The issues raised were whether a statutory duty to file ret…

The Apex Co‑operative Bank of Urban Bank of Maharashtra and Goa Ltd. applied to the RBI for a licence to operate an apex bank covering Maharashtra and Goa. The RBI required the bank to be registered under the Multi‑State Co‑operative Societies Act, 1984, which the bank did, and the Maharashtra Government subsequently d…

The appellant Navnitlal Sakarlal was bequeathed half of his grandfather's estate under a 1956 will that named no executor. The deceased's son, Sakarlal Balabhai, acted as legal representative and filed tax returns for the estate, being assessed on the estate's income until 1967-68. The Income Tax Officer held that the …

The Supreme Court examined whether Section 11AC of the Central Excise Act, 1944 imposes a mandatory penalty for short levy or non‑levy of duty and whether mens rea is an essential element. The Court held that the provision creates a civil liability for breach of a statutory obligation and the penalty is mandatory, leav…

United Commercial Bank, a nationalised bank, valued its investments at cost in the statutory balance sheet but, for income‑tax returns, valued the same stock‑in‑trade at the lower of cost or market value, a practice it had followed consistently for over thirty years and which the tax department had accepted. The bank c…

The Commissioner of Income Tax-III, Pune challenged the assessment of Sinhgad Technical Education Society, a charitable educational institution, which was treated as an Association of Persons after a search under Section 132 revealed alleged capitation fees. The Assessing Officer issued a notice under Section 153C for …

The assessee, an oil‑mill owner, gifted part of his machinery to his wife and three minor children and a firm was formed by his wife and another person. The firm leased the mill premises and machinery and the assessee rendered management services, receiving commission. The assessee had large losses carried forward from…

The statutory agent in Guntur exported tobacco to Japan and France and paid a 3% commission to non‑resident agents (Toshoku Ltd. and a French firm). The sale proceeds were received in India, and the agent made credit entries for the commissions in his books before remitting the amounts abroad. The Revenue assessed the …

National Petroleum Construction Co., a UAE‑incorporated firm, sought a Section 197 certificate for a 4% TDS rate on payments from ONGC for contracts involving both onshore and offshore work in FY 2019‑20. The Deputy Commissioner issued a certificate directing 4% TDS on the entire amount, despite the appellant’s earlier…

Shree Choudhary Transport Company (the appellant) entered into a contract to transport cement for a consignor and hired independent truck operators to perform the work. The appellant received freight charges from the consignor after TDS was deducted, but failed to deduct TDS on payments to the truck operators where eac…

The appellants, prospective buyers, entered into an agreement to purchase a 9,500‑sq‑yard plot with two godowns for Rs 99,84,500 and reported the transaction under s.269UC of the Income Tax Act. The Income Tax Department’s appropriate authority, after a valuation showing the market value to be about 15% higher than the…

The case concerned a show‑cause notice issued under the Central Excises and Salt Act, 1944 for alleged short levy of excise duty by a sole proprietor who died in 1989. The legal heirs challenged the notice, arguing that the Act contains no provision to continue assessment against a dead person’s estate. The Supreme Cou…

Hindustan Housing & Land Development Trust Ltd. owned land requisitioned and later acquired by the Government of West Bengal. The initial compensation award of Rs.24,97,249 was appealed, and an arbitrator enhanced it to Rs.30,10,873 with interest and recurring payments. While the State appealed the award, it deposited …

Vodafone Idea Ltd. filed income‑tax returns for AY 2014‑15 to AY 2017‑18 claiming large refunds. The Assessing Officer issued notices under s.143(2) for each year and, invoking s.143(1D) and s.241A, declined to process the returns under s.143(1) and withheld refunds, arguing that the notice itself sufficed to defer pro…

PILCOM, a joint committee of the cricket boards of Pakistan, India and Sri Lanka that organised the 1996 World Cup, made payments from its London bank accounts to the International Cricket Council and various non‑resident cricket associations. The Income Tax Officer issued a show‑cause notice under s.194E for failure t…

Four Rajasthan co‑operative societies with substantial losses were amalgamated into Rajasthan R.S.S. & Ginning Mills Fed. Ltd. on 1 January 1993, after which the appellant sought to carry forward the accumulated losses of the amalgamated societies and set them off against its own profits under Sections 72 and 72A of th…

The Competent Authority initiated forfeiture proceedings under SAFEMA against Amritlal Chandmal Jain, whose detention under COFEPOSA had earlier been challenged by several writs of habeas corpus. Although the High Court had quashed the detention order and the SAFEMA proceedings, the Competent Authority later sought to …

The assessee, Gwalior Rayon Silk Manufacturing Co., claimed depreciation on the written‑down value of roads and drains constructed within its factory premises, arguing that they form part of the factory building under Section 32 of the Income‑Tax Act, 1961. The Income‑Tax Officer disallowed the claim, but the Appellate…

M.R. Pratap, the Managing Director of Rayala Corporation Private Ltd., signed and verified the company's income‑tax return for AY 1965‑66, which was later found to be false. He was prosecuted under section 277 of the Income‑Tax Act for wilfully making a false verification. The appellant contended that the term "person"…

The appellant, a civil servant in the Cooperative Societies department, claimed that Government Order No. 559 (May 4, 1961) entitled him to a promotion to Deputy Registrar in 1965 under the principle of reservation extended to all cadres. He filed a representation petition in 1977, which the Administrative Tribunal dis…

Associated Cement Co. Ltd. applied for a Tax Credit Certificate under the 1965 Scheme framed under s.280ZD of the Income Tax Act, seeking credit for both the regular central excise duty (under the Central Excise and Salt Act, 1944) and the special excise duty imposed by s.80 of the Finance Act, 1965. The authority gran…

The Supreme Court was asked to consider whether, under its Article 142 powers, it could issue blanket directions that all interim stays granted by High Courts should automatically lapse after six months and that High Courts must dispose of such cases on a day‑to‑day basis. The Court examined the object of interim order…

The Supreme Court examined whether Dearness Allowance (DA), City Compensatory Allowance (CCA) and House Rent Allowance (HRA) paid to government employees fall within the definition of "salary" under Section 17 of the Income Tax Act, 1961 and are therefore taxable. The appellants argued that these allowances are merely …

The Calcutta State Transport Corporation (CSTC), a statutory body created under the Road Transport Corporations Act to provide road transport services, claimed that its income was exempt from tax under Section 10(20) of the Income‑Tax Act, 1961, on the ground that it was a "local authority" as defined in Section 3(31) …

The Income Tax authorities conducted a search and seizure at the premises of M/s K.C.C. Software Ltd., seizing jewellery, cash and fixed‑deposit receipts and restraining five bank accounts under sections 132(3) and 132(8) of the Income‑Tax Act, 1961. The appellants filed writ petitions seeking release of the seized ass…

The assessee, a partnership firm of three partners, lost one partner on 12 January 1974. The partnership deed did not contain a clause allowing the firm to continue after a partner's death, so under Section 42 of the Partnership Act the firm dissolved on that date. The surviving partners formed a new partnership deed t…

The appellant, S.P. Gramophone Co., sought registration of its partnership under Section 26A of the Income Tax Act, 1922 for AY 1961‑62 after a fresh partnership deed added four new partners to the original two, who were disabled. The Income Tax Officer rejected the application, alleging that the new partners were mere…

The Supreme Court examined whether the three‑month payment period prescribed in Section 67(1) of the Voluntary Disclosure of Income Scheme, 1997 could be extended. The Court held that the word "shall" makes the deadline mandatory and that Section 67(2) expressly deems a declaration invalid if payment is not made within…

The appellant, S.R. Kumar, sold agricultural lands situated within the municipal limits of Bina for the assessment years 1981-82 and 1983-84 and was assessed to capital gains tax. The Income Tax Officer levied tax, the Tribunal held that the profit was not capital gains, and the High Court dismissed the appellant's wri…

Associated Power Co. Ltd., an electricity generation and distribution company, appropriated Rs 46,460 to a Contingency Reserve as required by the Electricity (Supply) Act, 1948 and claimed it as a deduction for the assessment year 1973‑74. The Income Tax Officer rejected the claim; the Appellate Assistant Commissioner …

The appellant, Vijay Krishnaswami, was searched in 2016 and Rs.4.93 crore of unaccounted cash was seized, leading the Revenue to initiate prosecution under s.276C(1) of the Income Tax Act for the assessment year 2017-18. The appellant filed a quashing petition and later applied to the Settlement Commission under s.245C…

The appellant, a former managing director of Sri Lakshmi Hotel Private Ltd., challenged the e‑auction of the company's property, alleging that the reserve price was under‑valued, that the liquidator failed to form a Stakeholders’ Consultation Committee, and that the liquidator violated Regulation 33 by not cancelling t…

The Supreme Court examined the Commissioner of Income Tax (Control) Ludhiana's claim for weighted deduction under Section 35B(1)(b) of the Income Tax Act in favour of Mis Hero Cycles Pvt Ltd. The Court held that such deductions are permissible only when the expenditure is wholly and exclusively incurred for purposes en…

J.K. Synthetics Ltd filed a refund claim that was rejected, appealed and the appeal was allowed by the Collector (Customs). The Collector of Central Excise then appealed before the Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT). At the hearing on 31 August 1987 the appellant was absent, and CEGAT heard t…

The appellant, Sumitomo Heavy Industries, entered into a turn‑key offshore platform contract with the respondent, ONGC, which contained a clause (17.3) obligating the respondent to compensate the contractor for any necessary and reasonable extra cost caused by a change in Indian law after the bid closing date. After th…

The appellants were subjected to a search under Section 132 of the Income Tax Act and were issued notices under Section 153A for assessment years 1998-99 to 2004-05. They filed an application under Section 245C(1) before the Income Tax Settlement Commission, which was required to decide the matter by 31 March 2008 unde…

The Assessing Officer limited the deduction under Section 80‑IA of the Income Tax Act to the assessee's business income, but the Commissioner of Income Tax (Appeals) and the Tribunal allowed the deduction to be set off against the gross total income. Reliance Energy Ltd. appealed the revenue's challenge, arguing that S…

VLS Finance Ltd. and others challenged the Commissioner of Income Tax’s block assessment for the period up to 22 June 1998, arguing that the two‑year limitation under s.158BE(1) of the Income Tax Act had expired. The assessment was delayed because the assessing officer ordered a special audit under s.142(2A), which the…

The first respondent filed a suit for specific performance which was settled by a decree that appointed a court‑appointed receiver to hold the balance sale consideration of Rs.6,00,000. The appellants instructed the receiver to pay Rs.3,00,000 to Park Services Pvt. Ltd. for statutory liabilities and to release the rema…

The Gosar Family Trust was a private discretionary trust with two classes of beneficiaries: the first class could receive the trust's annual income, while the second class would receive the corpus and any accumulated income upon termination. The trustees had absolute discretion to distribute or retain income and could …

M.S.P. Nadar Sons, a registered firm, sold shares in several companies during FY 1972‑73, realizing a gross long‑term capital gain of Rs 5,61,508 and a long‑term capital loss of Rs 96,583. The assessee computed assessable capital gains by first applying the standard deduction of Rs 5,000 and the 50% deduction under Sec…

The Enforcement Directorate seized Rs.4,28,713 in 1966 and recorded statements from appellants K.T.S. Mohammed and M. Jamal Mohammed under Section 39 of the Foreign Exchange Regulation Act (FERA). Both appellants later retracted those statements, claiming they were obtained under duress, and the Income‑Tax Officer reco…

The assessee filed income‑tax returns for the assessment years 1964‑65, 1965‑66 and 1966‑67 well after the statutory due dates, resulting in penalties under section 271(1)(a) of the Income‑Tax Act, 1961. The Assessing Officer and the Appellate Assistant Commissioner upheld the penalties, but the Tribunal cancelled them…

The Straw Board Manufacturing Co. claimed concessional tax rates, a development rebate under section 33 and a deduction under section 80‑E of the Income Tax Act for the assessment years 1965‑66 to 1967‑68, asserting that strawboard manufacturing is a priority industry listed in the schedules. The Income Tax Officer rej…

Vibhuti Glass Works, a public limited company, mortgaged its glass factory and obtained a loan from the Industrial Finance Corporation on the condition that the Uttar Pradesh Government manage the factory for 20 years and receive a share of profits if they exceeded a prescribed limit. During the assessment year 1962-63…

The respondent challenged a notice of reassessment issued under section 147(b) of the Income‑Tax Act, 1961 for the assessment year 1965‑66, arguing that the notice was barred by the statutory limitation. The Gujarat High Court quashed the notice, relying on the earlier Banarsi Debi decision which treated the date of se…

The Deputy Commissioner of Income Tax issued a notice under Section 147 to reopen the assessment of M/s M.R. Shah Logistics for AY 2010-11 based on material seized during a search of an accommodation‑entry provider and on the alleged unaccounted income of promoters. The assessee argued that the reopening was premised o…

Vishal Ashwin Patel and others challenged the reopening of their income‑tax assessment under Section 148 of the Income Tax Act, 1961 by filing writ petitions under Article 226 of the Constitution. The Bombay High Court dismissed the writ petitions in a terse order stating it was not inclined to entertain them, without …

Berger Paints India Ltd. claimed a deduction under section 35D of the Income Tax Act for preliminary expenses, treating the premium received on its issued share capital as part of the "capital employed in the business of the company". The Assessing Officer disallowed the claim, the Commissioner of Income Tax allowed it…

Sumati Dayal, a dealer in art, claimed that large sums received in 1971‑72 and 1972‑73 were race winnings (Rs 3,11,831 and Rs 93,500). The Income‑Tax Officer treated the amounts as income from undisclosed sources under Section 68 of the Income‑Tax Act, 1961. The Settlement Commission, by majority, upheld the assessment…

Shubhlaxmi Mills Ltd., a textile mill, claimed a development rebate of Rs.1,26,233 for AY 1962-63 under s.33 of the Income Tax Act, 1961. The Income‑Tax Officer rejected the claim because the company had not created a reserve fund as required by s.34(3)(a). The claim was upheld by the Appellate Tribunal but reversed by…

The case concerned whether cellular mobile service providers (the assessees) were required to deduct tax at source under section 194-H of the Income Tax Act, 1961 on the margin earned by franchisees/distributors from selling prepaid kits at a price higher than the discounted price paid to the assessees. The Revenue arg…

Birla Cement Works, a cement manufacturer, paid transport operators for carriage of its goods without deducting tax at source under Section 194C of the Income Tax Act, 1961. The Central Board of Direct Taxes (CBDT) issued a circular on 8 March 1994 extending the applicability of Section 194C to all contracts, including…

The assessee, Narang Dairy Products, was granted a development rebate under Section 33(1)(a) of the Income Tax Act for its entire machinery in AY 1965-66. Subsequently, part of the machinery was sold and the remaining plant was leased to Hindustan Lever Ltd for three years, within the eight‑year period prescribed by Se…

The Supreme Court examined whether tax liabilities arising from settlements under the Taxation on Income (Investigation Commission) Act, 1947, which remained unpaid at the valuation dates, could be deducted as debts owed in computing net wealth under the Wealth‑Tax Act, 1957. The assessee companies argued that the unpa…

The appellants, former partners of a dissolved firm, challenged the taxability of proceeds from the sale of the firm's assets, arguing that the transaction did not constitute a slump sale and that no capital‑gain tax could be levied before the 1999 amendment. They filed appeals under Section 260A of the Income Tax Act,…

Mangalore Ganesh Beedi Works appealed to the Supreme Court against a Karnataka High Court order that affirmed the Income‑Tax Appellate Tribunal’s findings without providing any discussion or reasons. The appeals were filed under section 260‑A of the Income Tax Act, 1961. The Supreme Court held that even when a higher c…

K.C. Builders, a partnership engaged in construction, filed original income tax returns for AY 1983-84 to 1986-87 and later revised them based on an approved valuer's report. The Assessing Officer treated the difference as concealed income and levied penalties under Section 271(1)(c) and initiated prosecution under Sec…

The assessee, a liquor‑vendor firm, filed its return of income based on its own books, which the Income‑Tax Officer rejected and recomputed using an 8% net‑profit rate, resulting in a total income that was less than 80% of the correct income. A penalty under section 271(1)(c) of the Income‑Tax Act was levied, but the T…

The appellant, a firm of chartered accountants, constructed a residential building for its low‑paid employees and claimed an initial depreciation of 40% under Section 32(1)(iv) of the Income Tax Act, 1961. The Income Tax Officer rejected the claim on the ground that the provision applies only to "business" and not to "…

The U.P. Forest Corporation sought exemption from income tax on the ground that it was a charitable institution under Section 11(1)(a) of the Income Tax Act, 1961. The corporation had not obtained registration under Section 12A, which is a prerequisite for invoking the charitable exemption. The Supreme Court held that …

Marshall Sons and Co. (India) Ltd. (the holding company) and Marshall Sons and Manufacturing Ltd. (the subsidiary) entered into a scheme of amalgamation that specified a transfer date of 1 January 1982, but the scheme was only sanctioned by the Madras and Calcutta High Courts in late 1983 and early 1984. The Income Tax…

Aditya V. Birla, a technician, entered into a three‑year agreement with Thai Rayon Company to provide services in Bangkok and sought approval from the Indian Government to claim a deduction under Section 80RRA of the Income Tax Act, 1961. The Government refused, contending that the provision applied only to "employees"…

Sir Shadi Lal and Sons, a Hindu undivided family, leased a house and the lease required the tenant to keep the premises in good repair, while the lessor would handle major structural repairs. The Assessing Officer initially allowed a deduction for repairs under s.24(1)(i)(a) of the Income Tax Act, 1961, but on reopenin…

The Mandi Samiti, a market committee established under the Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964, collects market fees and is statutorily required to transfer certain amounts to the Mandi Parishad. Both entities are registered under Section 12AA of the Income Tax Act, 1961. The Revenue argued that these tr…

The appellant, a partner in two different partnership firms, contributed shares of limited companies to the firms as capital. The Revenue argued that the contribution constituted a transfer of a capital asset under section 45 of the Income Tax Act, 1961 and that a capital gain arose because the market value of the shar…

The Commissioner of Income Tax, Karnal appealed against judgments of the High Court of Punjab and Haryana which had held that supporting manufacturers were entitled to the same deduction under Section 80HHC of the Income Tax Act as direct exporters, relying on the Baby Marine Exports decision. The Supreme Court examine…

The deceased K.R. Patel and B.G. Amin were appointed executors and trustees under a 1962 will that directed payment of debts, conveyance of specific legacies, conversion of remaining assets into cash and donation to charitable purposes. The will created a public trust, which was registered in December 1964 after the es…

The Supreme Court examined a series of civil appeals concerning the claim of weighted deduction under Section 35B(1)(b) of the Income Tax Act, 1961. It held that the onus lies on the assessee to prove that any expenditure falls within the specific sub‑clauses of Section 35B(b); mere occurrence of activities abroad does…

Mis. Alagendran Finance Ltd. filed income‑tax returns for assessment years 1994‑95, 1995‑96 and 1996‑97, claiming a deduction under the Lease Equalisation Fund (LEF). The assessment orders accepted the LEF claim. In 2004 the Assessing Officer initiated reassessment proceedings for three unrelated items (share‑issue exp…

The respondent, a Hindu Undivided Family (HUF) that was a partner in a firm, effected a partial partition on 13‑April‑1979 and the Income Tax Officer (ITO) recognised it under Section 171(2) of the Income Tax Act, 1961. For AY 1980‑81 the HUF filed a return excluding income from the partitioned assets. The Finance Bill…

The respondent, Om Prakash, was a partner in two partnership firms in his capacity as Karta of a Hindu Undivided Family (HUF). The Income Tax Officer included the share of income earned by his minor children in his total income under Section 64(1)(i) and (ii) of the Income Tax Act, 1961. The assessee challenged this, a…

The Supreme Court examined whether a purchaser who has taken possession of flats after full payment, but without a registered deed, is the "owner" for tax purposes under Section 22 of the Income‑Tax Act, 1961. The assessee argued that the rental income should be taxed under Section 56 as "income from other sources" bec…

M/s Carpet India, a carpet manufacturer, sold its products to an export house (IKEA Trading) which exported them abroad. The assessee claimed a deduction under Section 80HHC of the Income Tax Act, 1961, on a par with a direct exporter, based on export incentives such as Duty Drawback and DEPB. The Assessing Officer all…

The respondents, K.B. Saha & Sons, purchased processed kendu leaves from the Orissa Forest Development Corporation under a tender, obtained lifting orders and transport permits, and moved the leaves to their factories in West Bengal. The State of Orissa levied sales tax under the Orissa Sales Tax Act, 1947, which the r…

The Delhi High Court, on a public‑interest writ filed by a parents' federation, held that several unaided recognised schools in Delhi were commercialising education by charging excessive fees and transferring surplus funds to their managing societies. The schools appealed to the Supreme Court, challenging the Director …

The Madhya Pradesh Road Development Corporation sought to acquire land for a highway project and determined compensation using the circle rate fixed under the Indian Stamp Act, as prescribed by the Collector’s Guidelines. The landowners challenged the award, arguing that the compensation was excessive and that the "the…

Hindustan Elector Graphites Ltd filed its return for AY 1989‑90 on 29‑Dec‑1989 before the Finance Act 1990 amended Section 28 of the Income‑Tax Act to tax cash compensatory assistance received against exports, with retrospective effect from 1967. The company had received Rs 1,31,41,030 as such assistance in the previou…

The Supreme Court examined whether a parcel of land situated on Mount Road, Madras, which had been used for raising bananas and vegetables, qualified as "agricultural land" under the Income Tax Act, 1961 and thus could be exempt from capital gains tax. The assessee argued that the land was agricultural and therefore no…

The Revenue (Commissioner of Income Tax) appealed an ITAT order that had allowed the assessee, M/s Rashtadrood (HUF), under Section 260A of the Income Tax Act, 1961. The High Court dismissed the appeal after hearing both parties but neither framed any substantial question of law nor provided reasons for its conclusion.…

The Commissioner of Income Tax appealed against the Madras High Court’s decision that the Completed Contract Method of accounting for chit discount, used by M/s Bilahari Investment (P) Ltd., was valid. The assessee companies, engaged in chit fund business, had historically applied the Completed Contract Method, which t…

Criminal proceedings under the Income‑Tax Act were instituted against the respondents while appeals against the income‑tax assessments were pending before the Income‑Tax Appellate Tribunal. The respondents sought a stay of the criminal case, which was granted by the Metropolitan Magistrate, affirmed by the Sessions Cou…

The appellant, Brooke Bond India Ltd., a public limited company, issued ordinary shares at a premium to increase its share capital and incurred Rs 13,99,305 in expenses, which it claimed as a deductible revenue expense under Section 37(1) of the Income Tax Act, 1961. The Assessing Officer disallowed the deduction on th…

Sandvik Asia Ltd. received refunds for assessment years 1977-78, 1978-79, 1981-82 and 1982-83 and was entitled to interest under Sections 214 and 244 of the Income Tax Act, 1961. The Income Tax Department delayed payment of that interest for periods ranging from 12 to 17 years. The appellant filed writ petitions claimi…

The appellants, two sisters who were shareholders of a company in liquidation, received agricultural land as part of the distribution of the company's assets. The Assessing Officer treated the market value of the land as a capital gain under Section 46(2) of the Income Tax Act, 1961, and levied tax. While the Commissio…

The appellant filed a composite settlement application under section 245C of the Income Tax Act for assessment years 1948-49 to 1975-76. The Commissioner objected to settlement for the years 1948-49 to 1959-60 and the Settlement Commission rejected those years on 24 August 1977 without affording the appellant a hearing…

The appellant, Chironjilal Sharma HUF, had Rs 2,35,000 seized from his house during a search on 31 January 1990. An order under Section 132(5) of the Income Tax Act was passed on 31 May 1990, and the Assessing Officer appropriated the seized cash against the tax liability. The Income Tax Appellate Tribunal set aside th…

Honda Siel Power Products Ltd, a manufacturer of generators, claimed enhanced depreciation under section 43A of the Income Tax Act for foreign‑exchange fluctuations in the cost of machinery. The Income Tax Appellate Tribunal rejected the claim, failing to consider a coordinate‑bench judgment (Samtel Color Ltd) that was…

The deceased assessee, Sardar Arjun Singh Ahluwalia, entered into an agreement with Kalyanmal Mills Ltd. in 1946 for the sale of waste cotton. The Mills failed to pay amounts due for the periods corresponding to assessment years 1946-47 and 1947-48, leading to a suit and a final decree in December 1965. The amounts wer…

The Delhi High Court had ordered notices to be issued to a third‑party assessee after documents belonging to him were seized in a search of another entity's premises. The third‑party argued that the six‑year period for filing returns should commence from the date the seized materials were handed over to his Assessing O…

The Supreme Court upheld the constitutional validity of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016, which provides a unique identity number to residents based on biometric and demographic data. The petitioners challenged the Act on grounds of violation of the right…

The Assistant Commissioner of Income Tax alleged that a partnership firm, Mahajan Borewell & Co., and its three partners had failed to deduct tax at source, violating Section 276‑B of the Income Tax Act, 1961. The Special Court discharged the respondents on procedural grounds, and the High Court upheld the discharge, h…

Escorts Farms (Ramgarh) Ltd., a private limited company, sold shares it had purchased after 1954 and claimed capital gains by treating the actual purchase price of the original shares as the cost of acquisition, ignoring the effect of subsequently issued bonus shares. The Income‑Tax Officer, the Appellate Assistant Com…

O.P. Bhandari, a manager of a hotel under the Indian Tourism Development Corporation (ITDC), was terminated by a notice‑pay order under Rule 31(v) of the ITDC Conduct, Discipline and Appeal Rules, 1978. He challenged the constitutional validity of the rule, arguing that termination by mere notice or payment in lieu vio…

Mis. Swan Mills Ltd., a textile manufacturer, was served with show‑cause notices for differential excise duty and challenged the assessment before the Commissioner of Central Excise (Appeals). The appellant filed a declaration under Section 89 of the Finance Act, 1998 to avail the Kar Vivad Samadhan Scheme (KVSS) which…

The assessee, a firm owning rubber estates in Malaysia, earned business income and short‑term capital gains from the Malaysian property. The Income Tax Officer in India taxed both incomes, but the Commissioner of Income Tax (Appeals) held, relying on Article VII(1) of the India‑Malaysia Double Taxation Avoidance Agreem…

ITC Limited Gurgaon, a hotel operator, collected tips from customers and distributed them to its employees without deducting tax at source. The Assessing Officer treated the tips as salary, invoking Section 192 of the Income Tax Act and declared the assessee an assessee‑in‑default under Section 201. The assessees conte…

Veecumsees, a jeweller, also operated a cinema theatre (Safire Theatre) for which it obtained loans in 1961. The theatre was built in 1962 and ran until it was sold as a going concern on 31 July 1965. The Income Tax Officer disallowed interest on those loans as a deduction under Sec. 36(1)(iii) of the Income Tax Act fo…

The Cotton Sales Co-operative Society, a cooperative engaged in ginning, pressing and marketing of raw cotton supplied by its members, claimed exemption of the receipts from these activities under Section 81(i)(c) of the Income‑Tax Act, 1961 (as it stood before the 1968 amendment). The Assessing Officer rejected the cl…

Claggett Branch Ltd., a non‑resident company dealing in tobacco, had its income for assessment years 1959‑60 and 1960‑61 originally assessed on the basis of returns filed by its Indian agents under s.23(3) of the Income‑Tax Act, 1922. While assessing the later year 1962‑63 the Income‑Tax Officer discovered that the ove…

The assessee, a partner in a firm, gifted Rs.51,000 to his wife who then contributed the amount as capital to a newly formed partnership and became a partner. The Income Tax Officer included the wife’s share of the partnership profit in the assessee’s total income under section 64(1)(iii) of the Income Tax Act, 1961, a…

Dr. Partap Singh and his wife challenged the validity of a search warrant issued by an Assistant Director of Enforcement under Section 37 of the Foreign Exchange Regulation Act, 1973, alleging that the officer had no material to form a reasonable belief and failed to record the grounds in writing. The High Court had di…

The Association for Democratic Reforms and Common Cause filed two interlocutory applications seeking a stay on the sale of electoral bonds under the Electoral Bond Scheme, 2018, alleging that the scheme permits donor anonymity and violates transparency in political funding. The Court examined the scheme’s statutory bas…

The Supreme Court examined whether, before the Finance Act 2008 amendment, an assessing officer could extend the time for filing a special audit report under s.142(2C) of the Income Tax Act without an application by the assessee. The Delhi High Court had held that such power did not exist, rendering the assessment barr…

Delhi Farming and Construction (P) Ltd., an investment company, received compensation for compulsory acquisition of agricultural land in 1962. The directors transferred the entire amount to a capital reserve and did not declare any dividend for the assessment years 1974-75, 1975-76 and 1976-77, citing accumulated losse…

The case concerned whether the Union of India, as the tax authority, must pay interest on a tax refund made to M/s Tata Chemicals Ltd, a resident deductor who had deducted tax at source under Section 195(2) and later obtained a refund under Section 240. The Assessing Officer and the first appellate authority denied int…

The appellant, Assistant C.I.T., challenged the assessee Elecon Engineering's claim that roll‑over premium charges paid on foreign‑exchange forward contracts for a plant‑and‑machinery loan were deductible under Sections 36(1)(iii) or 37 of the Income‑Tax Act. The Tribunal and High Court had held the charges were revenu…

The case concerned whether employers could claim a deduction under Section 43‑B of the Income Tax Act, 1961 for contributions to provident or welfare funds that were paid after the statutory due date but before filing the income‑tax return. The Finance Act, 2003 deleted the second proviso of Section 43‑B and amended th…

Killick Nixon Ltd. filed its return for AY 1992‑93 and, after a revised return, the Assessing Officer disallowed several claims. The Commissioner of Income Tax (Appeals) upheld some items but set aside four heads – bad debt, income from house property, capital gains and a disallowance under Rule 6D – and remitted the m…

The appellant, GKN Driveshafts (India) Ltd., challenged the validity of notices issued under sections 148 and 143(2) of the Income Tax Act, 1961, before the Delhi High Court. The High Court dismissed the writ petition, holding it premature because the appellant could raise objections in its reply to the notices. On app…

The Principal Commissioner of Income Tax (Central)-1 sought to dismiss a miscellaneous application filed by NRA Iron & Steel Pvt. Ltd. for a recall of a Supreme Court judgment on the ground that the company had not been served with the notice of the Special Leave Petition (SLP). The company alleged that the notice was …

The appellant, a rice exporter, was required to contribute to a State Welfare Fund in order to obtain export permits. It claimed the contribution as a business expense deductible under Section 37(1) of the Income‑Tax Act, 1961. The Income‑Tax Officer and the Appellate Assistant Commissioner disallowed the deduction; th…

The appellant, Sanjabij Tari, appealed against the High Court’s ex‑parte order acquitting Kishore S. Borcar (respondent No.1) under Section 138 of the Negotiable Instruments Act for a bounced cheque of Rs.7.5 lakh. The central issue was whether the High Court could overturn the concurrent findings of the trial and sess…

The Delhi Development Authority (DDA) had allotted a plot to Sarita Vihar Club under a lease that gave DDA a pre‑emptive right to purchase and required Lieutenant Governor’s consent for any mortgage. The Club mortgaged the plot to Corporation Bank without such consent, defaulted on the loan and the Bank sought recovery…

Kotak Mahindra Bank Ltd. (formerly ING Vysya Bank) sought settlement of tax liabilities for several assessment years, disclosing additional lease income that had been treated as a financial transaction under RBI guidelines. The Settlement Commission, after considering the bank's cooperation and full disclosure, granted…

The Madras Bar Association challenged the constitutional validity of the National Tax Tribunal Act, 2005, which sought to transfer appellate jurisdiction from High Courts to a newly created National Tax Tribunal (NTT) for deciding substantial questions of law in tax matters. The Supreme Court held that while Parliament…

The Bombay Stock Exchange (BSE) declared member Suresh D. Shah a defaulter and the Income Tax Department sought to attach the proceeds of his membership card and securities under s.226(3) of the Income Tax Act. BSE argued that a membership card is a personal, non‑transferable privilege and that its lien under Rule 43 m…

Price Waterhouse Coopers Pvt. Ltd., a large consultancy firm, filed its 2000-01 return of income together with a tax audit report that clearly stated the provision for gratuity was not allowable under section 40A(7). However, the firm mistakenly claimed a deduction for that provision, resulting in an under‑assessment o…

The assessee, a general insurance company, incurred Rs. 1,04,28,500 as stamp duty and registration fees in connection with the increase of its authorized share capital and the issuance of bonus shares. The Assessing Officer disallowed the amount as capital expenditure, but the Commissioner of Income Tax (Appeals) allow…

Adair Dutta & Co. India Pvt. Ltd., a tenant in a Madras building, challenged an order under Section 269 UD of the Income Tax Act that required surrender of possession after the building was purchased by the Central Government under Section 269 UE, which stated the property would vest free from all encumbrances. The com…

The Supreme Court examined whether sums appropriated by companies for taxation, retirement gratuity, and proposed dividends could be treated as "other reserves" for capital computation under the Super Profits Tax Act, 1963 and the Companies (Profits) Sur‑tax Act, 1964. It held that amounts set aside for taxation are pr…

The assessee, Khyati Realtors Pvt. Ltd., advanced Rs 10 crore to a builder for the purchase of commercial premises, which later stalled and the amount was written off as a bad debt in 2009. The assessee claimed a deduction under Section 36(1)(vii) of the Income Tax Act, arguing that the advance was either a business de…

The appellant owned land that was leased to a college; the lease expired in 1967 and the Haryana Government issued a notification for compulsory acquisition on 15 May 1968, later making an award on 29 September 1970. The dispute centered on when capital gains under Section 45 of the Income‑Tax Act, 1961 accrued – wheth…

The Industrial Development Bank of India obtained a recovery order against M/s Arihant Threads Ltd. under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (RDDB Act), leading to an auction of the company's assets which was won by KSL & Industries Ltd. The company later invoked Section 22 of the S…

Mis. Toyota Motor Corporation appealed against the Commissioner of Income Tax after the Assessing Officer dropped penalty proceedings under Section 263 of the Income Tax Act. The Tribunal had held that initiating the proceedings was impermissible given the materials the assessee had placed before the officer. The Delhi…

The assessee, Suzuki Powertrain India Ltd (SPIL), was amalgamated into Maruti Suzuki India Ltd (MSIL) effective 1 April 2012. For Assessment Year 2012-13, a notice under s.143(2) of the Income Tax Act was issued to SPIL, which no longer existed, and a final assessment order adding Rs. 78.97 crore was passed in SPIL's n…

Prashanti Medical Services & Research Foundation, a charitable trust, obtained approval for its heart hospital project under Section 35AC of the Income Tax Act, enabling donors to claim tax deductions for contributions. After receiving large donations in 2015-16 and 2016-17, the Finance Act, 2016 inserted sub‑section (…

Mis. Lakshmi Machine Works filed its return for AY 1993-94 claiming a deduction under Section 80HHC of the Income Tax Act, 1961, excluding sales tax and excise duty from its total turnover. The Assessing Officer demanded recomputation of total turnover by adding those taxes, but the appellate authority held they were l…

The appellants, six purchasers of a flat, paid Rs 4,55,000 as earnest money under a sale agreement and later faced a compulsory purchase of the property by the Central Government under Chapter XX‑C of the Income‑Tax Act, 1961. The Appropriate Authority released the consideration to the vendor and retained amounts to sa…

The Supreme Court examined whether Amalgamation Pvt. Ltd., a bulk shareholder holding investments in numerous subsidiaries, could claim a capital loss on the forced sale of shares to a subsidiary of a subsidiary, whether a loss incurred while guaranteeing a subsidiary's loan qualified as a business loss, and whether re…

The Supreme Court examined whether the tax‑deduction‑at‑source (TDS) provisions in Chapter XVII‑B of the Income‑Tax Act are independent of the charging provisions that determine the assessability of salary income. It held that the TDS provisions are part of an integrated code and must be read with Section 9(1)(ii) (and…

The appellants, a group of co‑operative societies, had been claiming deductions under Section 80P(2)(a)(iii) of the Income‑Tax Act for profits earned from marketing agricultural produce of their members. After the Supreme Court’s 1994 decision in Assam Co‑operative case interpreting "of its members" as "produced by", t…

The dispute concerned whether Adani Power Ltd. was entitled to an adjustment in its monthly tariff payments – including carrying costs – after the Ministry of Commerce and Industry withdrew SEZ duty and service‑tax exemptions in 2015‑16. The parties relied on Article 13 of their Power Purchase Agreements, which provide…

The appellant, a joint Indian‑American venture, contributed technical know‑how valued at Rs.2,35,000 and received equity shares in return. It claimed the amount as revenue expenditure under the Income Tax Act, but the Assessing Officer treated it as capital expenditure and allowed only 1/14th under Section 35‑A. While …

The appellant, a partnership firm, had claimed a development rebate under sections 33(1)(a) and 34(3)(a) of the Income Tax Act for several assessment years. One partner died, causing the firm to dissolve on 3 March 1968, before the eight‑year utilisation period prescribed by section 34(3)(a). A new partnership was form…

Standard Triumph Motor Co. Ltd., a UK non‑resident, entered a 1939 collaboration agreement with an Indian company to receive a 5% royalty on sales. The Indian company credited the royalty in its books each year, but the royalty was only remitted to the UK in sterling. The assessee claimed that, because it maintained it…

The case concerned the interpretation of Explanation (2) to Section 40(b) of the Income Tax Act, 1961, which came into force on 1 April 1985. The issue was whether the explanation operated prospectively or was merely declaratory of the law already in force. The Supreme Court examined earlier decisions, particularly Bri…

The petitioners, industrial undertakings, challenged the validity of Rule 19A of the Income‑Tax Rules, 1962, which excluded borrowed capital and fixed the computation of "capital employed" on the first day of the previous year for the purpose of the tax exemption under Section 80J of the Income‑Tax Act. They also conte…

The partnership firm M/s. Mansukh Dyeing and Printing Mills revalued its assets on 1 January 1993, increasing their value by Rs 17.34 crore, and credited the surplus to the partners’ capital accounts in their profit‑sharing ratios. New partners who had contributed only small amounts of capital received large credits, s…

The Commissioner of Income Tax appealed against the orders of the Delhi and Punjab & Haryana High Courts which allowed M/s Modipon Ltd. to claim a deduction under Section 43B of the Income Tax Act, 1961 for the balance amount in its Personal Ledger Account (PLA) representing advance deposits of central excise duty. The…

The appellant, a computer engineer, travelled from Hyderabad to Chennai carrying Rs 65 lakhs in cash, disclosing the amount and a bank certificate to airport security. Although cleared at Hyderabad, he was intercepted at Chennai, detained for about 15 hours, and his cash was seized under the Income Tax Act; the inciden…

Mis. Sanjeev Woolen Mills, a manufacturer and exporter of woolen blankets, valued its closing stock of finished goods at market price (converted from US dollars) rather than at cost or the lower of cost/market. Due to a sharp rupee devaluation in AY 1992‑93, this method produced an inflated gross profit, enabling the f…

The suit concerned a house inherited by the late K. Basavaraja Urs and his son K.B. Ramchandra Raj Urs (defendant No.1). Plaintiffs Sarah C. Urs and P. Chandrakantaraj Urs entered into an agreement to purchase the property on 24 April 1979, with the late father acting through his son as power of attorney. Rs.1,00,000 w…

The Supreme Court examined whether the definition of "gross revenue" in clause 19.1 of the telecom licence agreement, which determines the Adjusted Gross Revenue (AGR) for licence fee calculation, could be challenged by the licensees. It held that the contractual definition is binding, that TRAI and the Telecom Dispute…

The Supreme Court examined whether two US‑incorporated companies, eFunds Corp. and eFunds IT Solutions Inc., had a permanent establishment (PE) in India under the India‑US Double Taxation Avoidance Agreement (DTAA). The Revenue argued that a fixed place of business, a service PE, and an agency PE existed through the In…

The assessee, Atul Mohan Bindal, filed his income tax return for AY 2002-03 and later the Assessing Officer added salary earned in Singapore, a retrenchment compensation, and interest income, imposing a penalty under Section 271(1)(c) of the Income Tax Act. The assessee contended that the additions were made on his own…

The Bihar State Financial Corporation, a statutory body under the State Financial Corporations Act, 1951, approved a loan to a small‑scale industrial unit and later agreed to an additional term loan of Rs 15 lakhs conditioned on the submission of a DGTD registration certificate. The loan agreement was registered withou…

Vikram Cement, a cement manufacturer, claimed CENVAT credit for duty paid on inputs (explosives, lubricating oil, welding electrodes) and capital goods (limestone crusher, mining equipment) used in its captive limestone mines adjacent to its factory. The department issued show‑cause notices rejecting the credit, arguin…

Varkey filed his income‑tax return on 16 April 1970. The Income‑Tax Officer (ITO) made an assessment on 27 March 1972, finding concealment of income amounting to less than Rs 25,000 and, on the same day, initiated penalty proceedings and later imposed a Rs 10,000 penalty. The Appellate Assistant Commissioner set aside …

Hyatt International Southwest Asia Ltd., a UAE‑resident company, entered into long‑term Strategic Oversight Services Agreements (SOSA) with Indian hotel owners to provide strategic, operational and financial oversight of hotels in Delhi and Mumbai. The Assessing Officer treated the fees earned under the SOSA as taxable…

The case involved a firm, M/s V.V. Enterprises, purportedly engaged in prize ticket business and collecting public deposits. Police seized about Rs. 1.18 crore from its premises, and the Assessing Officer found the firm’s books incomplete and could not explain the source of the deposits, treating the amount as undisclo…

The Supreme Court examined the constitutional validity of Section 4A of the Rajasthan Sales Tax Act, 1994, which levied tax on the first point sale of drugs, medicines and formulations by wholesalers to retailers based on the Maximum Retail Price (MRP) printed on the package rather than the actual consideration paid. T…

The Supreme Court examined whether the income of Ganga Bai Charities, a trust that owned a building let out as a marriage hall and operated a printing press, qualified for exemption under Section 11(l)(a) of the Income Tax Act, 1961. The trust argued that its income was wholly applied to religious, charitable, cultural…

The assessee, Prakash Chand Lunia, who dealt in silver, was found to have smuggled 146 slabs of silver which were confiscated by customs and a penalty imposed. He claimed the value of the confiscated silver as a business loss under Section 37(1) of the Income‑Tax Act, relying on the High Court's application of the Piar…

The Revenue challenged the Assessing Officer’s (AO) power to make additions to income tax assessments after a search under section 132/132A of the Income Tax Act, 1961. The central issue was whether, under section 153A, the AO could assess or reassess total income for completed or unabated assessments when no incrimina…

YUM! Restaurants (Marketing) Private Ltd., a wholly‑owned subsidiary of YRIPL, claimed that its advertising, marketing and promotion activities were carried out on a non‑profit, mutual‑concern basis and therefore its surplus should be exempt from tax. The Supreme Court examined the doctrine of mutuality, which requires…

The appellant, a trader, was assessed for AY 1998-99 and the Assessing Officer added Rs.2,26,000 as "cash credit" under Section 68 of the Income Tax Act, treating it as bogus entries because the appellant could not initially substantiate purchases from unregistered marble dealers. The appellant appealed, and the additi…

The UAE Exchange Centre, a UAE company, obtained RBI permission under the Foreign Exchange Regulation Act to operate liaison offices in India for limited functions such as receiving remittance data, printing cheques/drafts and couriering them to beneficiaries. The Authority for Advance Rulings held that income from the…

The Union of India challenged the constitutional validity of clause (f) inserted by the Finance Act, 2001 into Section 43B of the Income Tax Act, 1961, which made deductions for leave‑encashment payable only on actual payment. Exide Industries argued that the clause violated the assessee's right to choose a mercantile …

The appellant, B.L. Passi, claimed a deduction under Section 80-O of the Income Tax Act, 1961 for fees received from Sumitomo Corporation, Japan, alleging that he provided specialized industrial and commercial knowledge, market information, and technical assistance in the form of blue‑prints for automobile die manufact…

The Supreme Court considered whether interest earned on share application money that a company is statutorily required to keep in a separate bank account until shares are allotted can be taxed as income from other sources or set off against public issue expenses. The respondent company had shown the interest as income,…

Mahindra & Mahindra Ltd. obtained a loan of $650,000 from Kaiser Jeep Corporation to purchase tooling equipment. The loan, bearing 6% interest, was later waived by American Motor Corporation, the successor lender, resulting in a cash receipt of Rs 57,74,064 for Mahindra. The Income Tax Officer treated the waiver as tax…

M/s TechSpan India Private Ltd. filed its return for AY 2001‑02 declaring income from software development and human‑resource services, claiming common expenses and a deduction under s.10A. The assessing officer, after a show‑cause notice under s.143, rectified the assessment to nil tax. Later, the revenue issued a not…

The appellant, a partner in Nitya Kali Rice Mill, was subject to a search under Section 132 of the Income Tax Act at the firm’s premises, resulting in seizure of documents and cash. A notice under Section 158BC was issued to both the firm and the appellant on 9 September 1999, prompting the appellant to file a block re…