Judicial precedent
Landmark case law
Leading judgments set out in full: the facts, how the matter reached the court, the arguments on both sides, the reasoning, and the principles established. Every case is mapped from the Income Tax Act 1961 provision it was decided under to the corresponding section of the Income Tax Act 2025, with a note on how far the principle still holds under the new Act.
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Showing 113 of 113 judgments
Capital Gains · Supreme Court · 2025
PCIT v. Jupiter Capital Pvt Ltd
(2025) 302 Taxman 3 (SC)
Decided under Sections 2(47) & 45 → now Section 2 (definition of transfer); Section 67
Held: Yes. Reduction of capital extinguishes the shareholder's rights in the shares cancelled, and that extinguishment is a transfer. The resulting loss is a capital loss available for set off.
International Tax · Supreme Court · 2025
Hyatt International Southwest Asia Ltd v. ADIT
Supreme Court (2025)
Decided under Sections 9 & 90 → now Sections 9 & 159
Held: Yes on both counts. Continuous and pervasive operational control exercised through the hotel premises establishes a fixed place permanent establishment, and attribution to a profitable Indian establishment does not depend on the global profitability of the enterprise.
International Tax · Delhi High Court · 2024
Tiger Global International II Holdings v. Authority for Advance Rulings
(2024) 464 ITR 1 (Del)
Decided under Sections 9(1)(i), 90 & 96 → now Sections 9, 159, 178 & 179
Held: No. Grandfathering under the protocol protects investments acquired before the cut-off date and cannot be withheld by characterising the structure as designed for treaty benefit. A valid residency certificate cannot be brushed aside, and avoidance must be established through the proper statutory route.
GAAR & Anti-Avoidance · Telangana High Court · 2024
Ayodhya Rami Reddy Alla v. PCIT
Telangana High Court (2024)
Decided under Sections 95 to 102 and 94(8) → now Sections 178, 181, 183, 184 and 175
Held: Yes to the first and no to the second. A specific anti-avoidance provision does not oust the general rule; where the specific provision does not cover the arrangement, the general rule may still apply. The statutory process must run its course before the court will interfere.
Transfer Pricing · Supreme Court · 2023
SAP Labs India Pvt Ltd v. Income Tax Officer
(2023) 454 ITR 121 (SC)
Decided under Sections 92C & 92CA → now Sections 165 & 166
Held: High Courts can and must examine whether the arm's length price was determined in accordance with the statute and the Rules. Transfer pricing appeals are not immune from scrutiny merely because they involve comparables.
International Tax · Supreme Court · 2023
Assessing Officer v. Nestle SA
(2023) 458 ITR 756 (SC)
Decided under Section 90 → now Section 159
Held: A separate notification under Section 90(1) is required. The MFN clause is not self-operational, and the third country must have been a member of the OECD at the time the treaty with India was entered into.
International Tax · Delhi High Court · 2023
Blackstone Capital Partners (Singapore) VI FDI Three Pte Ltd v. ACIT
(2023) 452 ITR 111 (Del)
Decided under Sections 90 & 147 → now Sections 159 & 279
Held: No. A validly issued residency certificate is sufficient evidence of residence, beneficial ownership and legal ownership for treaty purposes, and reassessment cannot be founded on looking behind it.
Assessment & Reassessment · Supreme Court · 2023
PCIT v. Abhisar Buildwell Pvt Ltd
(2023) 454 ITR 212 (SC)
Decided under Sections 153A & 147 → now Sections 292–301 (block assessment) & 279
Held: No. For completed or unabated assessments, additions must rest on incriminating material found in the search. The Revenue's remedy in such cases is to reopen under the reassessment provisions, if otherwise available.
Charitable Trusts & NPOs · Supreme Court · 2022
ACIT (Exemptions) v. Ahmedabad Urban Development Authority
(2022) 449 ITR 1 (SC)
Decided under Sections 2(15), 11 & 13 → now Sections 346 & 355
Held: A GPU charity may charge fees and generate surplus, but only where the activity is undertaken in the actual course of advancing its object and the receipts stay within the statutory quantitative ceiling. Charging a markedly higher-than-cost price indicates business.
Charitable Trusts & NPOs · Supreme Court · 2022
New Noble Educational Society v. Chief CIT
(2022) 448 ITR 594 (SC)
Decided under Sections 10(23C)(vi) & 11 → now Sections 332 & 335
Held: 'Solely' means exclusively. An institution with objects extending beyond education does not qualify, even if education is its predominant activity. Compliance with applicable state and regulatory law is also relevant to approval.
Business & Profession · Supreme Court · 2022
Checkmate Services Pvt Ltd v. CIT
(2022) 448 ITR 518 (SC)
Decided under Sections 36(1)(va) & 43B → now Sections 29 & 37
Held: No. Employees' contributions are held in trust by the employer and must be deposited by the due date under the governing welfare legislation. The relaxation for payments made before the return due date applies only to the employer's own contributions.
Assessment & Reassessment · Supreme Court · 2022
Union of India v. Ashish Agarwal
(2022) 444 ITR 1 (SC)
Decided under Sections 147, 148 & 148A → now Sections 279, 280 & 281
Held: Rather than quash them, the notices are deemed to be notices under the new inquiry provision. The Revenue must supply the underlying material and follow the new procedure, and the taxpayer's objections are preserved.
Assessment & Reassessment · Supreme Court · 2022
PCIT v. Mahagun Realtors Pvt Ltd
(2022) 443 ITR 194 (SC)
Decided under Sections 143(3) & 170 → now Assessment provisions; succession on amalgamation
Held: No. The invalidity rule is not absolute. Where the amalgamation was concealed, returns were filed in the old name and the conduct of the assessee contributed to the error, the assessment is not void.
Capital Gains · Supreme Court · 2022
CIT v. Mansukh Dyeing and Printing Mills
(2022) 449 ITR 439 (SC)
Decided under Section 45(4) → now Section 67
Held: Yes. Crediting the revaluation surplus to partners' capital accounts, which they are then entitled to draw, amounts to a distribution of assets and attracts the charge — even though no asset physically leaves the firm.
International Tax · Supreme Court · 2021
Engineering Analysis Centre of Excellence Pvt Ltd v. CIT
(2021) 432 ITR 471 (SC)
Decided under Sections 9(1)(vi), 90 & 195 → now Sections 9, 159 & 393
Held: No. What is transferred is a copyrighted article, not a right in the copyright. Such payments are business profits, not royalty, under the relevant treaties, and no tax need be withheld where the non-resident has no permanent establishment in India.
Business & Profession · Supreme Court · 2021
South Indian Bank Ltd v. CIT
(2021) 438 ITR 1 (SC)
Decided under Section 14A → now Section 14
Held: No. A presumption arises that the investments were made out of the taxpayer's own funds where those funds exceed the investments, and proportionate disallowance of interest is not warranted.
International Tax · Supreme Court · 2020
Union of India v. UAE Exchange Centre
(2020) 425 ITR 30 (SC)
Decided under Sections 9 & 90 → now Sections 9 & 159
Held: No. The activity was preparatory or auxiliary in character and fell within the exclusion in the treaty. No part of the business profits was therefore taxable in India.
International Tax · Supreme Court · 2020
DIT v. Samsung Heavy Industries Co Ltd
(2020) 426 ITR 1 (SC)
Decided under Sections 9 & 90 → now Sections 9 & 159
Held: No. The burden is on the Revenue to show that the office carried on the core business rather than acting as a communication channel. Attribution must reflect the functions actually performed in India.
Business & Profession · Supreme Court · 2020
Shree Choudhary Transport Co v. ITO
(2020) 426 ITR 289 (SC)
Decided under Section 40(a)(ia) → now Section 35
Held: It applies to both. The provision covers sums on which tax was deductible and was not deducted, whether or not they remain outstanding at the close of the year.
Assessment & Reassessment · Supreme Court · 2020
New Delhi Television Ltd v. DCIT
(2020) 424 ITR 607 (SC)
Decided under Sections 147, 148 & 149 → now Sections 279, 280 & 282
Held: No. The taxpayer must be told the provision and the basis on which the extended period is invoked. A notice cannot be sustained on a ground never put to the taxpayer, though on the facts the reopening survived within the ordinary period.
Assessment & Reassessment · Supreme Court · 2019
PCIT v. Maruti Suzuki India Ltd
(2019) 416 ITR 613 (SC)
Decided under Sections 143(3) & 170 → now Assessment provisions; succession on amalgamation
Held: No. An assessment on a non-existent entity is a jurisdictional defect that goes to the root of the matter. It is void, and cannot be cured as a mere procedural irregularity.
Cash Credits & Unexplained Income · Supreme Court · 2019
PCIT v. NRA Iron & Steel Pvt Ltd
(2019) 412 ITR 161 (SC)
Decided under Section 68 → now Section 102
Held: Identity alone is not enough. The company must establish the identity of the investors, their creditworthiness, and the genuineness of the transaction. Where investors are non-existent or lack means, the credits may be assessed as the company's income.
Transfer Pricing · Delhi High Court · 2018
PCIT v. Kusum Health Care Pvt Ltd
(2018) 99 taxmann.com 431 (Del)
Decided under Sections 92B & 92C → now Sections 163 & 165
Held: No. Where the working capital position is already factored into the margins of the tested party, a further adjustment for outstanding receivables amounts to double counting.
International Tax · Supreme Court · 2018
ADIT v. E-Funds IT Solution Inc
(2018) 399 ITR 34 (SC)
Decided under Sections 9 & 90 → now Sections 9 & 159
Held: No. A permanent establishment requires a fixed place at the foreign enterprise's disposal through which it carries on its own business. Close commercial dependence between group companies does not by itself create one.
Business & Profession · Supreme Court · 2018
Maxopp Investment Ltd v. CIT
(2018) 402 ITR 640 (SC)
Decided under Section 14A → now Section 14
Held: No. The dominant purpose of holding the shares is irrelevant. Once exempt dividend income is in fact earned, expenditure relatable to it must be disallowed. The disallowance must, however, be computed on a proper basis with recorded satisfaction.
Charitable Trusts & NPOs · Supreme Court · 2018
CIT v. Rajasthan & Gujarati Charitable Foundation
(2018) 402 ITR 441 (SC)
Decided under Sections 11 & 32 → now Sections 335, 341 & 33
Held: Yes, on the law as it stood. Claiming the acquisition cost as application and claiming depreciation are not double deduction: the first determines whether income was applied in the year of acquisition, the second is a step in computing income in later years.
Capital Gains · Supreme Court · 2017
CIT v. Balbir Singh Maini
(2017) 398 ITR 531 (SC)
Decided under Sections 2(47)(v) & 45 → now Section 2 (definition of transfer); Section 67
Held: No. After the 2001 amendment to the Registration Act, an unregistered agreement has no effect in law for the purposes of Section 53A of the Transfer of Property Act. There is therefore no transfer, and no capital gain arises.
International Tax · Supreme Court · 2017
Formula One World Championship Ltd v. CIT
(2017) 394 ITR 80 (SC)
Decided under Sections 9 & 90 → now Sections 9 & 159
Held: Yes. The circuit was at the company's disposal and its commercially significant activity was carried on through it. A permanent establishment does not require a long or continuous presence where the activity is by nature short and recurring.
Business & Profession · Supreme Court · 2017
Godrej & Boyce Manufacturing Co Ltd v. DCIT
(2017) 394 ITR 449 (SC)
Decided under Section 14A → now Section 14
Held: The disallowance applies, because the dividend is exempt in the shareholder's hands whatever tax the company has paid. The prescribed method operates prospectively, and before it the Assessing Officer must determine the disallowance on a reasonable basis.
International Tax · Supreme Court · 2017
DIT v. A.P. Moller Maersk A/S
(2017) 392 ITR 186 (SC)
Decided under Sections 9(1)(vi), 9(1)(vii) & 90 → now Sections 9 & 159
Held: No. A pro-rata recovery of the actual cost of a shared facility, without any mark-up or profit element, is a reimbursement and not income. It is neither royalty nor a fee for technical services.
Transfer Pricing · Delhi High Court · 2016
Maruti Suzuki India Ltd v. CIT
(2016) 381 ITR 117 (Del)
Decided under Sections 92B & 92C → now Sections 163 & 165
Held: No. The existence of an international transaction must be established as a fact before any pricing exercise begins. It cannot be inferred merely because the Indian entity's marketing expenditure is high.
TDS & TCS · Supreme Court · 2016
ITC Ltd v. CIT (TDS)
(2016) 384 ITR 14 (SC)
Decided under Sections 15, 17 & 192 → now Sections 15, 16, 18 & 392
Held: No. Tips are payments voluntarily made by customers, not by the employer, and do not arise from the contract of employment. They are not salary, so the withholding obligation on salary is not attracted. The employer acts only as a conduit.
International Tax · Delhi High Court · 2016
DIT v. New Skies Satellite BV
(2016) 382 ITR 114 (Del)
Decided under Sections 9(1)(vi) & 90 → now Sections 9 & 159
Held: No. A treaty is a bilateral instrument and its terms cannot be amended by unilateral domestic legislation. Where the treaty definition is narrower, it prevails regardless of a later domestic expansion.
Assessment & Reassessment · Supreme Court · 2016
CIT v. Amitabh Bachchan
(2016) 384 ITR 200 (SC)
Decided under Section 263 → now Section 377
Held: The Commissioner is not confined to the grounds in the notice and may consider other aspects that emerge, provided the assessee is given a reasonable opportunity of being heard on them. What is required is opportunity, not a separate notice for every ground.
Capital Gains · Supreme Court · 2015
Fibre Boards (P) Ltd v. CIT
(2015) 376 ITR 596 (SC)
Decided under Section 54G → now Section 87
Held: Advances paid towards the purchase of land, building and plant amount to utilisation of the capital gain. Completion of the purchase within the period is not required.
Charitable Trusts & NPOs · Supreme Court · 2015
Queen's Educational Society v. CIT
(2015) 372 ITR 699 (SC)
Decided under Section 10(23C)(iiiad) → now Sections 332 & 335
Held: No. Where the surplus arises incidentally and is ploughed back into the educational activity, the institution does not exist for profit. Generating a surplus is not the same as having a profit motive.
Transfer Pricing · Delhi High Court · 2015
Sony Ericsson Mobile Communications India Pvt Ltd v. CIT
(2015) 374 ITR 118 (Del)
Decided under Sections 92B & 92C → now Sections 163 & 165
Held: The bright line test has no statutory basis and cannot be used to carve out a notional international transaction. Where the distributor is adequately compensated overall, no separate adjustment for marketing spend is warranted.
Transfer Pricing · Bombay High Court · 2015
CIT v. Tata Autocomp Systems Ltd
(2015) 374 ITR 516 (Bom)
Decided under Sections 92B & 92C → now Sections 163 & 165
Held: The rate prevailing where the loan is received and used. Benchmarking a foreign currency loan against Indian rupee lending rates is inappropriate, because the two are not comparable.
Business & Profession · Supreme Court · 2015
Taparia Tools Ltd v. JCIT
(2015) 372 ITR 605 (SC)
Decided under Sections 36(1)(iii) & 37(1) → now Sections 32 & 34
Held: No. Where the liability has been incurred and the sum actually paid in the year, the whole of it is deductible in that year. The treatment adopted in the books does not govern, and there is no concept of deferred revenue expenditure in the Act absent a specific provision.
TDS & TCS · Supreme Court · 2015
CIT v. Japan Airlines Co Ltd
(2015) 377 ITR 372 (SC)
Decided under Section 194-I → now Section 393
Held: They are rent. The definition of rent in the withholding provision is very wide and covers any payment for the use of land, whatever the arrangement is called and whether or not the payee owns the property.
Transfer Pricing · Delhi High Court · 2015
CIT v. Cotton Naturals (I) Pvt Ltd
(2015) 276 CTR 445 (Del)
Decided under Sections 92B & 92C → now Sections 163 & 165
Held: The currency in which the loan is denominated and repayable. The interest rate applicable to that currency in the borrower's market governs, and the lender's domestic rates are irrelevant.
Trusts, Funds & Pass-Through Vehicles · Karnataka High Court · 2015
CIT v. India Advantage Fund-VII
Karnataka High Court (2015)
Decided under Sections 10(23FB), 115U, 161 & 164 → now Sections 222, 304 & 307
Held: Yes. Where the contributors and their proportionate interests can be ascertained, the trust is determinate. Income is assessable in the contributors' hands and the fund is not chargeable at the maximum marginal rate.
Capital Gains · Supreme Court · 2014
Sanjeev Lal v. CIT
(2014) 365 ITR 389 (SC)
Decided under Sections 2(47) & 54 → now Section 2 (definition of transfer); Section 82
Held: The agreement to sell itself created a right in favour of the buyer and extinguished a corresponding right of the seller. That date can be treated as the date of transfer for applying the Section 54 time limit.
Charitable Trusts & NPOs · Supreme Court · 2014
CIT v. Dawoodi Bohara Jamat
(2014) 364 ITR 31 (SC)
Decided under Sections 12AA & 13(1)(b) → now Sections 332 & 351
Held: No. A composite religious and charitable trust is entitled to registration. The restriction concerning benefit to a particular community goes to the allowance of exemption at assessment, not to the grant of registration.
Transfer Pricing · Bombay High Court · 2014
Vodafone India Services Pvt Ltd v. Union of India
(2014) 368 ITR 1 (Bom)
Decided under Sections 92 & 92B → now Sections 161 & 163
Held: No. The issue of shares at a premium is a capital account transaction that gives rise to no income. Transfer pricing provisions are machinery for computing income and cannot create income where none arises.
Transfer Pricing · Delhi High Court · 2014
Li & Fung India Pvt Ltd v. CIT
(2014) 361 ITR 85 (Del)
Decided under Section 92C → now Section 165
Held: No. The mark-up must be applied to the taxpayer's own cost base. Costs not incurred by the taxpayer, and risks it does not assume, cannot be brought into the computation.
TDS & TCS · Supreme Court · 2014
Union of India v. Tata Chemicals Ltd
(2014) 363 ITR 658 (SC)
Decided under Sections 195, 240 & 244A → now Sections 393 & 437
Held: Yes. The State, having received and retained money without right, must refund it with interest. Interest under Section 244A is payable to the deductor from the date the tax was paid to the date of refund.
Transfer Pricing · Delhi High Court · 2014
CIT v. Cushman and Wakefield (India) Pvt Ltd
(2014) 367 ITR 730 (Del)
Decided under Sections 37(1), 92C & 92CA → now Sections 34, 165 & 166
Held: No to both. The officer's role is to price the transaction, not to decide whether the expenditure should be allowed. Deductibility is for the Assessing Officer to determine separately under the ordinary provisions.
General Principles · Supreme Court · 2014
CIT v. Vatika Township Pvt Ltd
(2014) 367 ITR 466 (SC)
Decided under Principle of statutory interpretation — applies across the Act → now Applies across the IT Act 2025
Held: The presumption is against retrospectivity. An amendment imposing a new burden operates prospectively unless the legislature clearly provides otherwise; only a clarificatory or beneficial provision that creates no new liability may be applied to earlier periods.
International Tax · Delhi High Court · 2014
DIT v. Copal Research Ltd
(2014) 371 ITR 114 (Del)
Decided under Section 9(1)(i) → now Section 9
Held: Only where the Indian element is substantial. Shares must derive their value substantially from assets in India, which the Court read as requiring the Indian assets to represent at least half of the total value.
International Tax · Delhi High Court · 2014
Linde AG v. DIT
(2014) 365 ITR 1 (Del)
Decided under Sections 2(31), 4 & 9 → now Sections 2, 4 & 9
Held: No, where the scope of work, responsibilities and remuneration of each member are separate and each bears its own risk and earns its own profit. A joint bid and joint liability to the customer do not by themselves create an association of persons.
Business & Profession · Supreme Court · 2013
CIT v. Excel Industries Ltd
(2013) 358 ITR 295 (SC)
Decided under Sections 28 & 145 → now Sections 26 & 276
Held: In the year of utilisation. Income accrues only when a right to receive it becomes vested and enforceable; until the licence is used, the benefit is contingent and no real income has arisen.
Penalties · Supreme Court · 2013
MAK Data P Ltd v. CIT
(2013) 358 ITR 593 (SC)
Decided under Section 271(1)(c) (replaced by Section 270A from AY 2017-18) → now Sections 439 & 440
Held: No. A surrender made after the Revenue has confronted the taxpayer with incriminating material is not voluntary. The statutory presumption applies unless the taxpayer offers a bona fide explanation, and a plea of buying peace is not such an explanation.
International Tax · Andhra Pradesh High Court · 2013
Sanofi Pasteur Holding SA v. Department of Revenue
(2013) 354 ITR 316 (AP)
Decided under Sections 9(1)(i) & 90 → now Sections 9 & 159
Held: Not taxable in India. Under the treaty, gains from the alienation of shares are taxable only in the state of residence of the transferor. A genuine holding company with real investment purpose is not a device, and retrospective domestic amendments cannot override a treaty.
Capital Gains · Supreme Court · 2012
Vodafone International Holdings BV v. Union of India
(2012) 341 ITR 1 (SC)
Decided under Sections 9(1)(i) & 45 → now Sections 9 & 67
Held: On the law as it then stood, no. The transaction was a bona fide offshore transfer of a foreign company's shares, and the Indian authorities had no jurisdiction to tax it.
Transfer Pricing · Delhi High Court · 2012
CIT v. EKL Appliances Ltd
(2012) 345 ITR 241 (Del)
Decided under Sections 92C & 92CA → now Sections 165 & 166
Held: No. The officer's mandate is to determine the price of the transaction, not to sit in judgment on whether the taxpayer should have entered into it. Commercial expediency is for the businessman to decide.
Assessment & Reassessment · Bombay High Court · 2012
CIT v. Pruthvi Brokers & Shareholders Pvt Ltd
(2012) 349 ITR 336 (Bom)
Decided under Sections 139(5), 251 & 254 → now Sections 263(5), 360 & 363
Held: Yes. Goetze restricts only the Assessing Officer's power to entertain a new claim made otherwise than by a revised return. It does not limit the jurisdiction of the Commissioner (Appeals) or the Tribunal, who may consider a claim not made in the return; whether to entertain it in a particular case is a matter for their discretion.
Penalties · Supreme Court · 2012
Price Waterhouse Coopers Pvt Ltd v. CIT
(2012) 348 ITR 306 (SC)
Decided under Section 271(1)(c) (replaced by Section 270A from AY 2017-18) → now Sections 439 & 440
Held: No. Where the error is inadvertent and the correct position is apparent from the audited accounts and the tax audit report filed with the return, the mistake is bona fide and penalty is not warranted.
TDS & TCS · Supreme Court · 2011
CIT v. Bharti Cellular Ltd
(2011) 330 ITR 239 (SC)
Decided under Sections 194J & 9(1)(vii) → now Sections 393 & 9
Held: Technical services connote a human element. Where a facility operates automatically without human intervention, the payment is for the use of a facility rather than for technical services — but the question requires expert evidence on the facts.
International Tax · Supreme Court · 2011
GVK Industries Ltd v. ITO
(2011) 332 ITR 130 (SC)
Decided under Section 9(1)(vii) → now Section 9
Held: Parliament may legislate in respect of extra-territorial acts provided there is a real connection with India. A success fee for advisory services used in an Indian project has such a connection and is taxable as fees for technical services.
International Tax · Supreme Court · 2010
GE India Technology Centre Pvt Ltd v. CIT
(2010) 327 ITR 456 (SC)
Decided under Section 195 → now Section 393
Held: Only where the sum is chargeable to tax. The obligation to withhold arises on 'any sum chargeable under the provisions of this Act', and the words cannot be read out of the section.
Assessment & Reassessment · Supreme Court · 2010
CIT v. Kelvinator of India Ltd
(2010) 320 ITR 561 (SC)
Decided under Sections 147 & 148 → now Sections 279 & 280
Held: No. Reopening requires tangible material indicating escapement of income. A mere change of opinion confers no power to reassess, which would amount to a power of review the statute does not grant.
Penalties · Supreme Court · 2010
CIT v. Reliance Petroproducts Pvt Ltd
(2010) 322 ITR 158 (SC)
Decided under Section 271(1)(c) (replaced by Section 270A from AY 2017-18) → now Sections 439 & 440
Held: No. A claim that is not sustainable in law does not amount to furnishing inaccurate particulars. Penalty requires the particulars supplied to be inaccurate — a wrong claim, fully disclosed, is not the same thing.
GAAR & Anti-Avoidance · Supreme Court · 2010
CIT v. Walfort Share and Stock Brokers P Ltd
(2010) 326 ITR 1 (SC)
Decided under Sections 14A & 94(7) → now Sections 14 & 175
Held: No. The loss was real and arose on an actual transaction. The disallowance for expenditure relating to exempt income does not reach a loss on sale, and the court will not supply an anti-avoidance provision the legislature has not enacted.
Business & Profession · Supreme Court · 2009
CIT v. Woodward Governor India (P) Ltd
(2009) 312 ITR 254 (SC)
Decided under Sections 37(1) & 43A → now Sections 34, 42 & 43
Held: Deductible, where the liability is on revenue account. Under the mercantile system a loss arising from restating a revenue liability at the closing rate is an accrued liability, not a contingent one, and realisation is not a precondition.
Business & Profession · Supreme Court · 2009
Rotork Controls India (P) Ltd v. CIT
(2009) 314 ITR 62 (SC)
Decided under Section 37(1) → now Section 34
Held: Allowable, where it is based on a reliable estimate grounded in historical experience. A warranty provision meets the recognition tests for a liability; a provision made on an ad hoc or arbitrary basis does not.
Business & Profession · Supreme Court · 2009
CIT v. Alom Extrusions Ltd
(2009) 319 ITR 306 (SC)
Decided under Section 43B → now Section 37
Held: Yes to both. The employer's contribution is deductible if paid by the return due date, and the amendment deleting the restrictive proviso is curative and applies retrospectively.
TDS & TCS · Supreme Court · 2009
CIT v. Eli Lilly & Co (India) P Ltd
(2009) 312 ITR 225 (SC)
Decided under Sections 192 & 201 → now Sections 392 & 398
Held: Yes, where the payment abroad is for services rendered in India. The withholding obligation attaches to the salary as a whole, not merely to the component routed through the Indian payroll.
Charitable Trusts & NPOs · Supreme Court · 2008
American Hotel & Lodging Association Educational Institute v. CBDT
(2008) 301 ITR 86 (SC)
Decided under Section 10(23C)(vi) → now Sections 332 & 348
Held: At the threshold the authority examines the objects and the genuineness of the institution. Application of income is a matter for monitoring afterwards through the statutory conditions, not a ground for refusing approval at the outset.
Penalties · Supreme Court · 2008
Union of India v. Dharamendra Textile Processors
(2008) 306 ITR 277 (SC)
Decided under Section 271(1)(c) (replaced by Section 270A from AY 2017-18) → now Sections 439 & 440
Held: The liability is civil. Penalty is a statutory consequence of the conditions in the provision being met, and mens rea in the criminal sense need not be established.
Business & Profession · Supreme Court · 2007
S.A. Builders Ltd v. CIT (Appeals)
(2007) 288 ITR 1 (SC)
Decided under Section 36(1)(iii) → now Section 32
Held: Yes, if the advance was made as a measure of commercial expediency. The test is whether the funds were advanced for the assessee's own business purposes, not whether the assessee earned a direct return.
TDS & TCS · Supreme Court · 2007
Hindustan Coca Cola Beverage (P) Ltd v. CIT
(2007) 293 ITR 226 (SC)
Decided under Sections 194-I & 201 → now Sections 393 & 398
Held: No. Once the recipient has discharged the tax on the income, the same tax cannot be collected a second time from the deductor. The deductor remains liable for interest for the period of default and for any penalty.
International Tax · Supreme Court · 2007
Ishikawajima-Harima Heavy Industries Ltd v. DIT
(2007) 288 ITR 408 (SC)
Decided under Sections 9(1)(vii) & 5 → now Sections 9 & 5
Held: No. Territorial nexus is essential. Offshore supply where title passes outside India, and services rendered wholly outside India, are not chargeable merely because the project is located in India or the payment is made by an Indian party.
International Tax · Supreme Court · 2007
DIT v. Morgan Stanley & Co Inc
(2007) 292 ITR 416 (SC)
Decided under Sections 9 & 90 → now Sections 9 & 159
Held: Outsourcing to a captive performing support functions does not create a fixed place or agency permanent establishment, though deputation of the parent's employees can create a service permanent establishment. Where the captive is remunerated at arm's length, nothing further is attributable.
International Tax · Supreme Court · 2007
CIT v. Hyundai Heavy Industries Co Ltd
(2007) 291 ITR 482 (SC)
Decided under Sections 9 & 90 → now Sections 9 & 159
Held: No. A permanent establishment cannot be attributed profits from activities completed before it came into existence. Only the income arising from the Indian installation activity is taxable, computed as though the permanent establishment were a distinct enterprise.
Assessment & Reassessment · Supreme Court · 2007
ACIT v. Rajesh Jhaveri Stock Brokers (P) Ltd
(2007) 291 ITR 500 (SC)
Decided under Sections 143(1) & 147 → now Sections 270 & 279
Held: No. An intimation on summary processing is not an assessment and involves no formation of opinion, so there is no opinion capable of being changed. Reopening remains subject to the reason to believe requirement.
Charitable Trusts & NPOs · Supreme Court · 2007
CIT v. Gujarat Maritime Board
(2007) 295 ITR 561 (SC)
Decided under Sections 2(15) & 12A → now Sections 332, 346 & 355
Held: Yes. Developing and managing ports for the benefit of trade and the public is an object of general public utility, and a body whose income is statutorily committed to those purposes and cannot be distributed qualifies.
Capital Gains · Bombay High Court · 2006
CIT v. Ace Builders (P) Ltd
(2006) 281 ITR 210 (Bom)
Decided under Sections 50 & 54EC → now Sections 74 & 85
Held: Yes. Section 50 creates a deeming fiction only for the purpose of computation. It does not convert a long-term asset into a short-term one for every purpose of the Act, so the exemption remains available.
Capital Gains · Supreme Court · 2005
CIT v. D.P. Sandu Bros Chembur (P) Ltd
(2005) 273 ITR 1 (SC)
Decided under Sections 45 & 55; Section 56 → now Sections 67 & 90
Held: A tenancy right is a capital asset, so the consideration falls to be dealt with under the capital gains provisions. If it is not chargeable there, it cannot be assessed under the residuary head instead.
International Tax · Supreme Court · 2005
Tata Consultancy Services v. State of Andhra Pradesh
(2005) 271 ITR 401 (SC)
Decided under Andhra Pradesh General Sales Tax Act — applied to Sections 9(1)(vi) & 90 → now Sections 9 & 159 (by application)
Held: Canned software sold off the shelf is goods. Once a programme is put on a medium and marketed, it becomes a marketable commodity capable of being bought, sold, transmitted and stored, notwithstanding that copyright subsists in the underlying programme.
Capital Gains · Bombay High Court · 2003
Chaturbhuj Dwarkadas Kapadia v. CIT
(2003) 260 ITR 491 (Bom)
Decided under Section 2(47)(v) → now Section 2 (definition of transfer); Section 67
Held: Transfer occurs in the year in which the developer becomes willing to perform its part of the contract and possession is handed over in part performance, even if the conveyance is executed later.
International Tax · Supreme Court · 2003
Union of India v. Azadi Bachao Andolan
(2003) 263 ITR 706 (SC)
Decided under Section 90 → now Section 159
Held: The certificate is to be accepted as evidence of residence for treaty purposes. Treaty shopping is not by itself unlawful, and a treaty benefit cannot be denied merely because the structure was chosen for its tax advantages.
Assessment & Reassessment · Supreme Court · 2003
GKN Driveshafts (India) Ltd v. ITO
(2003) 259 ITR 19 (SC)
Decided under Sections 147 & 148 → now Sections 279 & 280
Held: On receiving a notice the taxpayer may seek the reasons recorded, which the officer is bound to furnish. The taxpayer may then file objections, and the officer must dispose of them by a speaking order before proceeding with the reassessment.
Charitable Trusts & NPOs · Supreme Court · 2001
CIT v. Thanthi Trust
(2001) 247 ITR 785 (SC)
Decided under Sections 11(4) & 11(4A) → now Section 344
Held: Yes. Where the business is held under trust, or is incidental to attaining the trust's objectives, and separate books are maintained, the income is eligible for exemption provided it is applied to the charitable purpose.
Charitable Trusts & NPOs · Supreme Court · 2001
CIT v. Programme for Community Organisation
(2001) 248 ITR 1 (SC)
Decided under Section 11(1)(a) → now Sections 341 & 342
Held: On gross receipts. The trust is entitled to accumulate the statutory percentage of the total income derived from property held under trust, not of the balance left over.
Capital Gains · Supreme Court · 2001
CIT v. Grace Collis
(2001) 248 ITR 323 (SC)
Decided under Sections 2(47) & 45 → now Section 2 (definition of transfer); Section 67
Held: Extinguishment is an independent limb. Rights in a capital asset may be extinguished without any corresponding transfer to another person, and such extinguishment is itself a transfer for capital gains purposes.
Business & Profession · Supreme Court · 2000
Bharat Earth Movers v. CIT
(2000) 245 ITR 428 (SC)
Decided under Section 37(1) → now Section 34
Held: Yes. A liability that has definitely arisen in the year is deductible even though it will be discharged in future and its quantification requires estimation. Only a contingent liability is excluded.
Assessment & Reassessment · Supreme Court · 2000
Malabar Industrial Co Ltd v. CIT
(2000) 243 ITR 83 (SC)
Decided under Section 263 → now Section 377
Held: Both conditions must be satisfied cumulatively. The order must be erroneous and prejudicial to the interests of the Revenue. Where the officer has taken one of two views permissible in law, the order is not erroneous merely because the Commissioner prefers the other.
TDS & TCS · Supreme Court · 1999
Transmission Corporation of AP Ltd v. CIT
(1999) 239 ITR 587 (SC)
Decided under Sections 195 & 195(2) → now Section 393
Held: Withholding attaches to the sum chargeable, and where a payment is composite the payer must apply to the Assessing Officer for a determination of the appropriate proportion rather than deciding unilaterally.
Business & Profession · Supreme Court · 1998
Tata Iron & Steel Co Ltd v. CIT
(1998) 231 ITR 285 (SC)
Decided under Sections 43(1) & 43A → now Sections 39 & 42
Held: No. The cost of an asset and the manner in which the purchase price is raised and repaid are two distinct matters. Fluctuation in the exchange rate on repaying the loan does not alter the actual cost of the asset.
Business & Profession · Supreme Court · 1997
Madras Industrial Investment Corporation Ltd v. CIT
(1997) 225 ITR 802 (SC)
Decided under Sections 37(1) & 145 → now Sections 34 & 276
Held: It must be spread. The discount is the price of obtaining the use of money over the debenture's term, so the liability is to be allocated over that period rather than deducted entirely in the year of issue.
Trusts, Funds & Pass-Through Vehicles · Supreme Court · 1996
ITO v. Ch. Atchaiah
(1996) 218 ITR 239 (SC)
Decided under Sections 4 & 160 → now Sections 4 & 303
Held: No. Under the 1961 Act the Assessing Officer must tax the right person, and only the right person. The option that existed under the 1922 Act was deliberately removed, so an assessment on the wrong person is not saved by the availability of an alternative.
Cash Credits & Unexplained Income · Supreme Court · 1995
Sumati Dayal v. CIT
(1995) 214 ITR 801 (SC)
Decided under Section 68 → now Section 102
Held: Yes. The taxing authorities are entitled to look at the surrounding circumstances and apply the test of human probabilities, and are not obliged to accept an explanation merely because it is supported by documents.
Trusts, Funds & Pass-Through Vehicles · Supreme Court · 1994
CIT v. Kamalini Khatau
(1994) 209 ITR 101 (SC)
Decided under Sections 161 & 164 → now Sections 304 & 307
Held: The Revenue may assess either. Where income of a discretionary trust has in fact been distributed to a beneficiary, it may be assessed in that beneficiary's hands, and the provision charging the trustee does not confer immunity on the recipient.
General Principles · Supreme Court · 1992
Radhasoami Satsang v. CIT
(1992) 193 ITR 321 (SC)
Decided under Principle of consistency — applies across the Act → now Applies across the IT Act 2025
Held: Ordinarily not. Although each assessment year is a separate unit and res judicata does not strictly apply, a fundamental aspect permeating different years that has been accepted should not be changed absent a material alteration in facts or law.
Capital Gains · Supreme Court · 1991
Vania Silk Mills (P) Ltd v. CIT
(1991) 191 ITR 647 (SC)
Decided under Sections 2(47) & 45 → now Section 2 (definition of transfer); Section 67
Held: No, on the law as it then stood. Destruction of an asset is not a transfer; the asset ceases to exist rather than passing to anyone, and insurance money is paid under the policy rather than as consideration for a transfer.
Trusts, Funds & Pass-Through Vehicles · Bombay High Court · 1990
Marsons Beneficiary Trust v. CIT
(1990) 188 ITR 224 (Bom)
Decided under Sections 161 & 164 → now Sections 304 & 307
Held: A trust is determinate where the beneficiaries and their shares are capable of being ascertained from the trust deed at the date it takes effect. It is not necessary that they be named, nor that the shares be quantified in money terms.
Capital Gains · Supreme Court · 1985
Sunil Siddharthbhai v. CIT
(1985) 156 ITR 509 (SC)
Decided under Sections 45 & 48 → now Sections 67 & 72
Held: A transfer does occur, but on the law as it then stood the consideration was not ascertainable — the credit to the capital account is a notional figure whose real worth depends on future events — so no computable gain arose.
GAAR & Anti-Avoidance · Supreme Court · 1985
McDowell & Co Ltd v. Commercial Tax Officer
(1985) 154 ITR 148 (SC)
Decided under Principle concerning tax avoidance — applies across the Act → now Applies across the IT Act 2025
Held: Legitimate tax planning within the law is permissible, but colourable devices and dubious methods adopted to avoid tax are not. The substance of an arrangement may be examined rather than accepting its form.
Capital Gains · Supreme Court · 1981
CIT v. B.C. Srinivasa Setty
(1981) 128 ITR 294 (SC)
Decided under Sections 45 & 48 → now Sections 67 & 72
Held: No. The charging section and the computation provisions together form an integrated code. Where the computation provision cannot apply because no cost of acquisition is identifiable, the charge itself fails.
Capital Gains · Supreme Court · 1981
K.P. Varghese v. Income Tax Officer
(1981) 131 ITR 597 (SC)
Decided under Section 52(2) (since omitted); relevant to Section 50C → now Sections 72, 78 & 91
Held: No. The burden lies on the Revenue to establish that the consideration was in fact understated. A provision aimed at tax evasion cannot be turned on an honest transaction merely because market value exceeds the stated price.
Charitable Trusts & NPOs · Supreme Court · 1980
CIT v. Surat Art Silk Cloth Manufacturers Association
(1980) 121 ITR 1 (SC)
Decided under Section 2(15) → now Sections 346 & 355
Held: No. Apply the predominant object test: if the dominant purpose is charitable and profit-making is merely ancillary or incidental to achieving it, the organisation remains charitable.
Business & Profession · Supreme Court · 1980
Empire Jute Co Ltd v. CIT
(1980) 124 ITR 1 (SC)
Decided under Section 37(1) → now Section 34
Held: Revenue. An enduring advantage is not decisive. Where the advantage is in the revenue-earning sphere — facilitating trading operations or enabling more efficient conduct of business without touching the fixed capital — the expenditure is revenue in nature.
Capital Gains · Supreme Court · 1979
CIT v. T.N. Aravinda Reddy
(1979) 120 ITR 46 (SC)
Decided under Section 54 → now Section 82
Held: Yes. 'Purchase' bears its ordinary meaning of acquiring for a price, and includes acquiring a share from co-owners. A narrow, technical construction is not warranted.
Trusts, Funds & Pass-Through Vehicles · Supreme Court · 1977
CWT v. Trustees of HEH Nizam's Family (Remainder Wealth) Trust
(1977) 108 ITR 555 (SC)
Decided under Sections 160 & 161 (and the wealth tax analogue) → now Sections 303 & 304
Held: In a representative capacity. The liability of the trustee is coextensive with, and no greater or less than, that of the beneficiary. The trustee is assessed in the same manner and to the same extent as the person represented.
Assessment & Reassessment · Supreme Court · 1976
ITO v. Lakhmani Mewal Das
(1976) 103 ITR 437 (SC)
Decided under Sections 147 & 148 → now Sections 279 & 280
Held: There must be a live link or close nexus between the material and the formation of belief. The belief must be that of a reasonable person acting on relevant grounds, and cannot rest on vague, remote or irrelevant material.
Charitable Trusts & NPOs · Supreme Court · 1975
Sole Trustee, Loka Shikshana Trust v. CIT
(1975) 101 ITR 234 (SC)
Decided under Section 2(15) → now Section 355
Held: 'Education' means systematic instruction, schooling or training — the process of training and developing knowledge and skill by normal schooling. It does not extend to every activity that spreads knowledge.
Cash Credits & Unexplained Income · Supreme Court · 1971
CIT v. Durga Prasad More
(1971) 82 ITR 540 (SC)
Decided under Section 68 → now Section 102
Held: No. Though an apparent state of affairs is to be treated as real unless shown otherwise, the onus of showing that the apparent is not the real lies on the party asserting it, and the authorities may test the story against ordinary human conduct.
Capital Gains · Supreme Court · 1967
CIT v. George Henderson & Co Ltd
(1967) 66 ITR 622 (SC)
Decided under Section 48 → now Section 72
Held: The consideration actually agreed. 'Full value of the consideration' means the whole price received or receivable for the transfer, and is not the same thing as the fair market value of the asset.
Capital Gains · Supreme Court · 1967
Miss Dhun Dadabhoy Kapadia v. CIT
(1967) 63 ITR 651 (SC)
Decided under Sections 48 & 55 → now Sections 72 & 90
Held: Yes. The rights entitlement comes into existence at the cost of a depreciation in the value of the original holding, and that diminution is the real cost the shareholder incurred to acquire it.
Charitable Trusts & NPOs · Supreme Court · 1965
CIT v. Andhra Chamber of Commerce
(1965) 55 ITR 722 (SC)
Decided under Section 2(15) → now Sections 346 & 355
Held: Yes. Promoting and protecting trade and industry serves the public interest. That members derive an incidental benefit does not deprive the object of its public character.
Business & Profession · Supreme Court · 1964
CIT v. Malayalam Plantations Ltd
(1964) 53 ITR 140 (SC)
Decided under Section 37(1) → now Section 34
Held: It is wider. The expression covers not merely the earning of profits but the many acts incidental to carrying on a business, including protecting and preserving it, provided the expenditure is not of a personal or capital character.
Assessment & Reassessment · Supreme Court · 1961
Calcutta Discount Co Ltd v. ITO
(1961) 41 ITR 191 (SC)
Decided under Section 147 (and its predecessor) → now Section 279
Held: The duty is to disclose fully and truly all primary facts. Drawing inferences from those facts is the officer's function, and a failure by him to draw the correct inference does not constitute a failure to disclose by the taxpayer.