Library / Income-tax Act, 2025: The Professional's Master Guide
Appendix E: Digest of Landmark Rulings
The table lists the rulings cited in this guide, with the topic to which each relates. The principles in these judgments were laid down under the 1961 Act (or other laws where stated), and continue to guide the interpretation of the corresponding provisions of the 2025 Act where the language and scheme are the same.
Case | Court and year | Principle | Relevant to |
|---|---|---|---|
McDowell and Co. Ltd. v. CTO | SC, 1985 | Colourable devices are not legitimate tax planning | Anti-avoidance |
Union of India v. Azadi Bachao Andolan | SC, 2003 | Treaty benefits available to genuine residents; tax planning within law permitted | Treaties |
Vodafone International Holdings v. Union of India | SC, 2012 | Look at the transaction as a whole; offshore share transfer not taxable under law then in force | Indirect transfers |
Commissioner of Customs v. Dilip Kumar and Co. | SC, 2018 | Exemptions to be strictly construed at the threshold | Interpretation |
Empire Jute Co. Ltd. v. CIT | SC, 1980 | Enduring benefit test is not conclusive | Capital vs revenue |
CIT v. Mahindra and Mahindra Ltd. | SC, 2018 | Waiver of a loan for capital assets is not taxable as business benefit or remission | Business income |
S.A. Builders Ltd. v. CIT | SC, 2006 | Interest on borrowings used for interest-free advances to sister concerns allowed on commercial expediency | Interest deduction |
T.R.F. Ltd. v. CIT | SC, 2010 | Bad debt needs only to be written off in the books; no need to prove it is bad | Bad debts |
Checkmate Services (P) Ltd. v. CIT | SC, 2022 | Employees' PF and ESI contributions must be deposited by the due date under those laws | Payment basis |
Maxopp Investment Ltd. v. CIT | SC, 2018 | Disallowance for exempt income applies even to shares held as stock-in-trade | Section 14 |
CIT v. B.C. Srinivasa Setty | SC, 1981 | No capital gains where cost cannot be conceived; led to "cost nil" provisions | Capital gains |
Sanjeev Lal v. CIT | SC, 2014 | Agreement to sell with advance can be the relevant date for reinvestment time limits | Section 82 |
CIT v. Madhur Housing and Development Co. | SC, 2017 | Deemed dividend taxed in the hands of the shareholder, not the borrowing concern (question referred to a larger bench in 2018) | Deemed dividend |
PCIT v. Maruti Suzuki India Ltd. | SC, 2019 | Assessment on a company that ceased to exist on amalgamation is void | M&A |
Engineering Analysis Centre of Excellence v. CIT | SC, 2021 | Software licence payments to non-residents not royalty under treaties | International |
Formula One World Championship Ltd. v. CIT | SC, 2017 | A circuit at the disposal of the foreign enterprise was a fixed place PE | PE |
DIT v. Morgan Stanley and Co. Inc. | SC, 2007 | No further attribution to a PE where the Indian entity is paid at arm's length for all functions and risks | PE attribution |
GE India Technology Centre v. CIT | SC, 2010 | TDS on payments to non-residents only on sums chargeable to tax | Withholding |
Hindustan Coca Cola Beverage v. CIT | SC, 2007 | Tax cannot be recovered from deductor if payee has paid it; interest remains | TDS |
CIT v. Kelvinator of India Ltd. | SC, 2010 | No reopening on change of opinion; tangible material needed | Reassessment |
GKN Driveshafts (India) Ltd. v. ITO | SC, 2002 | Reasons for reopening to be given and objections decided | Reassessment |
Union of India v. Ashish Agarwal | SC, 2022 | Old procedure notices after 2021 treated as show cause under new procedure | Reassessment |
CIT v. Ace Builders (P) Ltd. | Bom HC, 2005 | Deeming of depreciable asset gains as short-term is limited to computation | Capital gains |
UCO Bank v. CIT | SC, 1999 | CBDT circulars bind tax authorities, including beneficial relaxations | Interpretation |
CCE v. Ratan Melting and Wire Industries | SC, 2008 | Circulars cannot override the statute and do not bind courts or taxpayers | Interpretation |
Ram Prashad v. CIT | SC, 1972 | Managing director may be an employee depending on control by the board | Salaries |
Arun Kumar v. Union of India | SC, 2006 | Perquisite valuation Rules upheld; perquisite is a benefit given by the employer | Salaries |
CIT v. Eli Lilly and Co. (India) (P) Ltd. | SC, 2009 | TDS on salary includes the portion paid abroad for services in India | Salary TDS |
CIT v. Podar Cement (P) Ltd. | SC, 1997 | Owner for house property is the person entitled to the income in his own right | House property |
Sultan Brothers (P) Ltd. v. CIT | SC, 1964 | Inseparable letting of building with other assets is not house property income | House property |
Shambhu Investment (P) Ltd. v. CIT | SC, 2003 | Rent from letting as primary object is house property income | House property |
Chennai Properties and Investments Ltd. v. CIT | SC, 2015 | Rent can be business income where letting is the main business | House property |
Raj Dadarkar and Associates v. ACIT | SC, 2017 | House property or business depends on facts of each case | House property |
Taparia Tools Ltd. v. JCIT | SC, 2015 | Deduction follows the Act, not the spreading in books | Business income |
Palam Gas Service v. CIT | SC, 2017 | TDS disallowance covers amounts paid as well as payable | Business income |
CIT v. Alom Extrusions Ltd. | SC, 2009 | Employer PF contribution paid by return due date allowed; curative amendment | Payment basis |
CIT v. Smifs Securities Ltd. | SC, 2012 | Goodwill depreciable under old law (reversed by Finance Act 2021) | Depreciation |
CIT v. Balbir Singh Maini | SC, 2017 | No transfer where JDA not executed; part performance needs registered agreement | Capital gains |
CIT v. C.M. Kothari | SC, 1963 | Cross gifts to spouses are clubbed as indirect transfers | Clubbing |
CIT v. Lovely Exports (P) Ltd. | SC, 2008 | Share money from named investors not company's income (pre-2012 law) | Unexplained credits |
PCIT v. NRA Iron and Steel (P) Ltd. | SC, 2019 | Company must prove identity, creditworthiness and genuineness of investors | Unexplained credits |
CIT v. Raja Benoy Kumar Sahas Roy | SC, 1957 | Agriculture requires basic operations on land | Agricultural income |
Gowli Buddanna v. CIT | SC, 1966 | Joint family property remains so with a sole surviving coparcener | HUF |
Surjit Lal Chhabda v. CIT | SC, 1975 | HUF can exist with one male member, wife and unmarried daughters | HUF |
CIT v. Mansukh Dyeing and Printing Mills | SC, 2022 | Revaluation credited to partners and withdrawn attracts capital gains in the firm | Firms |
ACIT v. Ahmedabad Urban Development Authority | SC, 2022 | General public utility entities lose exemption if business receipts exceed the limit | Non-profit organisations |
New Noble Educational Society v. CCIT | SC, 2022 | Educational institutions must exist solely for education | Non-profit organisations |
The Mavilayi Service Co-operative Bank Ltd. v. CIT | SC, 2021 | Exclusion of co-operative banks does not apply to credit societies lending to members | Co-operatives |
Totgars Co-operative Sale Society Ltd. v. ITO | SC, 2010 | Interest on surplus funds in commercial banks is taxable | Co-operatives |
Apollo Tyres Ltd. v. CIT | SC, 2002 | Book profit for MAT cannot be recomputed beyond specified adjustments | MAT |
Marshall Sons and Co. (India) Ltd. v. ITO | SC, 1997 | Amalgamation takes effect from the appointed date in the scheme | M&A |
AO v. Nestle SA | SC, 2023 | MFN clauses in treaties need a separate notification | International |
ADIT v. E-Funds IT Solution Inc. | SC, 2017 | Back-office subsidiary not a PE of the foreign parent | International |
CIT v. Kotak Securities Ltd. | SC, 2016 | Standard facilities available to all are not technical services | TDS |
Ishikawajima-Harima Heavy Industries Ltd. v. DIT | SC, 2007 | Territorial nexus for FTS; later overridden by amendment | International |
Sony Ericsson Mobile Communications India (P) Ltd. v. CIT | Del HC, 2015 | Bright line test for AMP rejected | Transfer pricing |
Maruti Suzuki India Ltd. v. CIT | Del HC, 2015 | AMP not an international transaction without an arrangement | Transfer pricing |
CIT v. Glaxo SmithKline Asia (P) Ltd. | SC, 2010 | Suggested domestic transfer pricing | Transfer pricing |
Vodafone India Services (P) Ltd. v. Union of India | Bom HC, 2014 | Issue of shares to foreign parent does not give rise to income | Transfer pricing |
CIT v. Walfort Share and Stock Brokers (P) Ltd. | SC, 2010 | Dividend stripping loss allowed before the specific rule | Anti-avoidance |
CIT v. Biocon Ltd. | Kar HC, 2020 | ESOP discount deductible as employee cost | Business income |
Apex Laboratories (P) Ltd. v. DCIT | SC, 2022 | Freebies to doctors not deductible | Business income |
Union of India v. Rajeev Bansal | SC, 2024 | Time limits for reassessment notices during the TOLA period | Reassessment |
T.S. Balaram, ITO v. Volkart Brothers | SC, 1971 | Mistake apparent must be obvious, not debatable | Rectification |
Malabar Industrial Co. Ltd. v. CIT | SC, 2000 | Revision needs order both erroneous and prejudicial to revenue | Revision |
Pooran Mal v. Director of Inspection | SC, 1974 | Seized material usable as evidence even if search irregular | Search |
PCIT v. Abhisar Buildwell (P) Ltd. | SC, 2023 | Completed assessments disturbed in search only on incriminating material | Search |
CIT v. Kapurchand Shrimal | SC, 1981 | Appellate powers co-terminous with the Assessing Officer | Appeals |
Collector, Land Acquisition v. Mst. Katiji | SC, 1987 | Liberal approach to condonation of delay | Appeals |
PCIT v. LG Electronics India (P) Ltd. | SC, 2018 | 20% deposit for stay is not a rigid rule | Appeals |
CIT v. Chhabil Dass Agarwal | SC, 2013 | Writ not entertained where statutory appeal is available | Appeals |
Union of India v. Tata Chemicals Ltd. | SC, 2014 | Interest payable on refund of excess TDS | Refunds |
CIT v. Reliance Petroproducts (P) Ltd. | SC, 2010 | Unsustainable claim with full disclosure is not inaccurate particulars | Penalties |
Union of India v. Dharmendra Textile Processors | SC, 2008 | Civil penalties do not need mens rea | Penalties |
Sasi Enterprises v. ACIT | SC, 2014 | Prosecution for non-filing can proceed despite pending assessment | Prosecution |
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