LiveLawBiz Direct Tax Weekly Round-Up: April 13 - April 19, 2026
Kapil Dhyani
20 April 2026 10:42 AM IST
HIGH COURTS
Allahabad HC
Demonetisation Deposits From Cash In Hand Cannot Be Rejected Without Evidence: Allahabad High Court
Case Title : Principal Commissioner Of Income Tax I, v. Medharaj Techno Concept Pvt. Ltd. Thru. Authorized Person
Case Number : INCOME TAX APPEAL No. - 4 of 2026
CITATION : 2026 LLBiz HC (ALL) 31
The Allahabad High Court on 8 April held that where a taxpayer explains cash deposits during 2016 Indian demonetization as arising from cash in hand, the Assessing Officer cannot reject the explanation in the absence of any material to the contrary. A Bench comprising Justices Shekhar B. Saraf and Abdhesh Kumar Chaudhary dismissed the appeal filed by the Principal Commissioner of Income Tax, Lucknow against Medharaj Techno Concept Pvt. Ltd. and upheld the order of the Income Tax Appellate Tribunal in favour of the taxpayer.
Bombay HC
Old Income Tax Demands Cannot Surface On Portal Without Serving Underlying Orders: Bombay High Court
Case Title : Capegemini Technology Services India Ltd vs Deputy Commissioner of Income Tax, Circle- 1(1), Pune & Ors.
Case Number : WRIT PETITION NO.16068 OF 2024
CITATION : 2026 LLBiz HC(BOM) 204
The Bombay High Court recently observed that old income tax demands could not be sustained where the underlying orders were not made available to the taxpayer, observing that such demands cannot be permitted to surface without proper disclosure. “Old matters and demands cannot be allowed to suddenly surface on the portal without the underlying orders being available and served. Consequently, the impugned demands cannot be sustained,” the court said. A Division Bench of Justices B. P. Colabawalla and Firdosh P. Pooniwalla held that the writ petition was maintainable before it under Article 226(2) of the Constitution, noting that even a part of the cause of action arising within its territorial jurisdiction was sufficient to entertain the plea.
Developer Undertaking Risk And Execution Qualifies For Section 80-IA Deduction: Bombay High Court
Case Title : Commissioner of Income Tax Central-II v. Patel Engg. Ltd.
Case Number : INCOME TAX APPEAL NO. 1146 OF 2004 WITH INCOME TAX APPEAL NO. 934 OF 2008
CITATION : 2026 LLBiz HC(BOM) 205
The Bombay High Court on 11 March held that a taxpayer-company undertaking substantial development work, investment risk and technical execution cannot be treated as a mere works contractor and is entitled to deduction under Section 80-IA(4) of the Income Tax Act for profits from infrastructure projects. A Bench comprising Justices M. S. Karnik and S. M. Modak dismissed the Revenue's appeals against Patel Engineering Ltd., holding that the latter acted as a “developer” of infrastructure facilities in relation to the Koyna Project in Maharashtra and the Srisailam Project in Andhra Pradesh.
Bombay High Court Admits Limited 115JB Questions In ACC Case, Holds Settled Issues Not Appealable
Case Title : Commissioner of Income Tax- LTU Vs ACC Limited
Case Number : INCOME TAX APPEAL NO. 1 OF 2020
CITATION : 2026 LLBiz HC(BOM) 206
The Bombay High Court on 16 March partly admitted an appeal filed by the Department against ACC Limited, holding that several issues raised by the Revenue were already covered by binding precedents and therefore did not give rise to any substantial question of law. A Bench of Justices B.P. Colabawalla and Firdosh P. Pooniwalla, however, admitted the appeal on four questions concerning computation of book profits under Section 115JB of the Income Tax Act, 1961. They held: “The appeal is therefore admitted on questions (iv) (reframed), (vi), (ix) and (x). The appeal may be heard along with Income Tax Appeal No. 1658 of 2016 for the Assessment Year 2002-03.”
Case Title : Pr. Commissioner of Income-Tax-14, Mumbai Vs Pfizer Products India Pvt. Ltd.
Case Number : INCOME TAX APPEAL NO.2479 OF 2018
CITATION : 2026 LLBiz HC(BOM) 209
Holding that reimbursements without any profit element do not attract TDS, the Bombay High Court has dismissed an income tax appeal filed by the Revenue against Pfizer Products India Pvt. Ltd. over cross-charges of Rs.14,51,77,000 paid to its sister concern-Pfizer Ltd. A Division Bench of Justice M. S. Karnik and Justice S. M. Modak held, "The cross-charge paid by the Assessee-Respondent in terms of the cost-sharing agreement between the Assessee and M/s. Pfizer Ltd, did not have any income/profit component embedded with it and the said transaction was purely in the nature of reimbursement of expenditure incurred by M/s. Pfizer Ltd without any markup and therefore is not liable to TDS".
Case Title : GM Modular Private Limited Vs Principal Commissioner of Income Tax – 1 and Ors.
Case Number : WRIT PETITION NO. 378 OF 2026
CITATION : 2026 LLBiz HC(BOM) 210
The Bombay High Court on 30 March held that if a taxpayer made a deduction claim based on a binding High Court judgment, penalty under Section 270A of the Income Tax Act cannot be imposed subsequently, merely because the claim was later disallowed following a Supreme Court ruling. A Division Bench of Justices B. P. Colabawalla and Firdosh P. Pooniwalla held that penalty is not automatic and does not arise where a taxpayer makes a bona fide claim based on the prevailing legal position.
Delhi HC
Case Title : VNG Automotive Pvt. Ltd. v. Assistant Commissioner of Income Tax
Case Number : ITA 795/2004 & ITA 796/2004
CITATION : 2026 LLBiz HC (DEL) 368
The Delhi High Court has recently held that interest earned by VNG Automotive Pvt. Ltd. on funds earmarked for setting up its manufacturing unit cannot be taxed as “income from other sources”, finding that the funds were not surplus but were directly linked to project obligations. The Division Bench of Justice V. Kameswar Rao and Justice Vinod Kumar said: “We find that the funds in the present case were not lying as surplus but the same were earmarked to facilitate the balance payment for plant and machinery etc. for which advances were made by the assessee. The funds are inextricably linked to the setting up of the business of the assessee, and as such, would be covered by the judgment of the Supreme Court in Bokaro Steel Ltd (supra), and not Tuticorin Alkali Chemicals & Fertilizers Ltd. (supra)."
Case Title : Abhinav Jain v. ITO
Case Number : W.P.(C) 2638/2023
CITATION : 2026 LLBiz HC (DEL) 372
The Delhi High Court has upheld reassessment proceedings against an taxpayer for Assessment Year 2018–19, holding that the defect of granting less than seven days to respond to a notice under Section 148A(b) of the Income Tax Act stood cured by a corrigendum issued within the limitation period. A Division Bench of Justices V. Kameswar Rao and Vinod Kumar rejected the petitioner's challenge that the notice was invalid for providing only six days to respond, contrary to the statutory requirement of “not less than seven days”.
Case Title : VRG Electronics Pvt Ltd v. Principal Commissioner Of Income Tax Delhi 7 & Anr.
Case Number : W.P.(C) 2625/2026
CITATION : 2026 LLBiz HC (DEL) 374
The Delhi High Court has held that a beneficial circular issued by the Central Board of Direct Taxes (CBDT) allowing delay condonation in cases of “genuine hardship” cannot be restricted to specific assessment years and must be applied uniformly to all bona fide cases. A Division Bench of Justices Dinesh Mehta and Vinod Kumar passed the ruling while allowing a writ petition filed by VRG Electronics Pvt. Ltd., challenging the rejection of its application for condonation of delay in filing Form 10IC for Assessment Year 2023–24.
Case Title : Pr. Commissioner of Income Tax, Central-II v. M/s Globe Capital Market Ltd.
Case Number : ITA 364/2024
CITATION : 2026 LLBiz HC (DEL) 379
The Delhi High Court has upheld the deletion of a Rs 16.33 crore addition against Globe Capital Market Ltd., holding that a company's buyback of its own shares does not amount to acquisition of “property” and Section 56(2)(x) of the Income Tax Act has no application to such transactions. A Division Bench of Justices Dinesh Mehta and Vinod Kumar dismissed the appeal filed by the Principal Commissioner of Income Tax, affirming the Income Tax Appellate Tribunal's decision, which had upheld relief granted to the assessee, a company engaged in share broking and trade clearing.
Gujarat HC
Case Title : Chartered Accountants Association, Surat (CAAS) & Ors. v. Union of India & Ors.
Case Number : R/SPECIAL CIVIL APPLICATION NO. 16428 of 2025
CITATION : 2026 LLBiz HC(GUJ) 52
The Gujarat High Court recently directed the Union government to file an affidavit in a writ petition filed by the Chartered Accountants Association, Surat, and others, alleging continued non-compliance with its 2015 directions on the timely availability of income tax return e-filing utilities. A Division Bench of Justice A.S. Supehia and Justice Pranav Trivedi noted that despite its earlier ruling in All Gujarat Federation of Tax Consultants v. CBDT, the respondent Department had not followed directions requiring that ITR forms and utilities be made available at the start of the assessment year (April 1).
Madras HC
Actor Vijay Appeals Single-Bench Ruling Of Madras High Court Upholding ₹1.5 Crore Income Tax Penalty
Case Title : C Joseph Vijay v. The Deputy Commissioner of Income Tax and others
Case Number : WA 39265/2026
Actor-turned-politician Joseph Vijay has moved a Division Bench of the Madras High Court against a single-judge ruling that upheld a ₹1.5 crore income tax penalty imposed on him. The appeal, filed last month, is yet to be listed for hearing. The challenge is to a judgment by Justice Senthilkumar Ramamoorthy, who had dismissed Vijay's writ petition and upheld the penalty linked to alleged undisclosed income of Rs 15 crore for the financial year 2015–16.
Case Title : The Commissioner Of Income Tax, Coimbatore v. M/s Martin Lottery Agencies Ltd.
Case Number : TC No. 955 of 2008
CITATION : 2026 LLBiz HC (MAD) 99
The Madras High Court on 9 April held that the difference between the face value of lottery tickets and the discounted price at which a taxpayer sells them to dealers does not constitute “commission.” Therefore, it is not subject to tax deduction at source (TDS) under Section 194G of the Income Tax Act. The Division Bench of Justices G. Jayachandran and Shamim Ahmed dismissed the Revenue's appeal and upheld the Tribunal's order in favour of Martin Lottery Agencies Ltd.
No Bad Debt Deduction From Taxable Income Without Actual Write-Off: Madras High Court
Case Title : Commissioner of Income Tax I, Chennai vs M/s.The India Cements Ltd.
Case Number : Tax Case (Appeal) Nos. 53 & 54 of 2010
CITATION : 2026 LLBiz HC (MAD) 100
The Madras High Court has held that a taxpayer cannot claim a bad debt deduction merely by declaring a debt as irrecoverable and must comply with statutory conditions requiring an actual write-off in its books. A Division Bench of Justice G. Jayachandran and Justice Shamim Ahmed observed, “Merely stating that a bad and doubtful debt is an irrecoverable is not sufficient to claim deduction. Appropriate treatment in the accounts, together with compliance of the conditions in sections 36(1)(vii), 36(2), and the explanation to section 36(1)(vii), are mandatory. Write off without following the mandate would not entitle the taxpayer to claim a deduction."
Telangana HC
Suspicion, Human Probabilities Insufficient For Tax Additions Without Evidence: Telangana High Court
Case Title : The Prl. Commissioner of Income Tax-2, Hyderabad v. Bharathi Cement Corporation Pvt. Ltd.
Case Number : ITTA.Nos. 245, 246, 366 & 367 of 2019
CITATION : 2026 LLBiz HC (TEL) 16
The Telangana High Court on 6 March held that additions under Section 68 of the Income Tax Act, 1961 cannot be sustained merely on suspicion or the test of human probabilities and must rest on concrete evidence. A Division Bench of Justices Sam Koshy and Suddala Chalapathi Rao dismissed the Revenue's appeals and upheld the Income Tax Appellate Tribunal (ITAT)'s decision to remand the issue of Rs. 182 crore share premium received by Bharathi Cement Corporation Pvt. Ltd. for fresh examination.
ITAT
ITAT Mumbai Grants Relief To Sachin Khedekar, Holds Delay In Filing Form 67 Not Fatal For FTC Claim
Case Title : Sachin Shrikant Khedekar v. Asst Commissioner of Income Tax
Case Number : ITA No.431/Mum./2026
CITATION : 2026 LLBiz ITAT(MUM) 93
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) on 10 April allowed an appeal filed by actor Sachin Shrikant Khedekar and held that delay in filing Form No. 67 is a procedural lapse and cannot justify denial of foreign tax credit under Section 90 of the Income Tax Act, 1961. A Bench of Judicial Member Sandeep Singh Karhail and Accountant Member Bijayananda Pruseth held: “.....mere delay in filing Form No. 67 as per the provisions of Rule 128(9), as they stood during the year under consideration, will not preclude the assessee from claiming the benefit of foreign tax credit in respect of tax paid outside India.....”
ITAT New Delhi Dismisses Revenue Appeal Against Bharat Kalia, Finds No 50CA Violation In Share Sale
Case Title : DCIT v. Bharat Kalia
Case Number : ITA No.295/Del/2025
CITATION : 2026 LLBiz ITAT(DEL) 94
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) on 10 April dismissed the Revenue's appeal against Bharat Kalia and held that no addition under Section 50CA of the Income Tax Act, 1961 can be made where the sale consideration of unquoted shares exceeds the fair market value determined under the prescribed rules. A Bench comprising Judicial Member Anubhav Sharma and Accountant Member Manish Agarwal observed: “provision of Rule 11UA(2) of the Rules are applicable for the purpose of valuation of unquoted equity shares of section 56(2)(viib) of the Act. Whereas for the purpose of determination of fair market value of unquoted equity shares u/s 50CA of the Act, provisions as contained in sub-clause (b) & (c) of Rule 11UA(1)(b) of the Rule are applicable, according to which report could be obtained either from Merchant Banker or from CA.”
Revenue Cannot Disallow Trademark Depreciation Once Accepted In Initial Year: ITAT Mumbai
Case Title : DCIT – Central Circle – 3(4), Mumbai v. Transworld Furtichem Private Limited
Case Number : ITA No. 2693/Mum./2025
CITATION : 2026 LLBiz ITAT(MUM) 95
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) on 10 April held that depreciation on a trademark arising out of an amalgamation, once allowed in the initial year, cannot be disallowed in subsequent years in the absence of any change in facts. A Bench comprising Accountant Member Om Prakash Kant and Judicial Member Sandeep Singh Karhail delivered the ruling while deciding Revenue's appeals and Transworld Furtichem Private Limited's cross-objections for multiple assessment years.
ITAT Mumbai Allows Co-operative Society Tax Deduction On Interest Income From Co-op Banks
Case Title : New Bombay Co-operative Commercial Complex Premises Society Ltd. v. ITO
Case Number : ITA No. 1440/M/2026
CITATION : 2026 LLBiz ITAT(MUM) 96
The Mumbai Bench of the Income Tax Appellate Tribunal has granted relief to a co-operative society by holding that deduction under Section 80P(2)(d) is allowable on interest income earned from deposits with co-operative banks, noting that the issue is already covered by judicial precedents including Pathare Prabhu Cooperative Housing Society Ltd. v. ITO. “As the issue is squarely covered in favour of the Assessee by the aforesaid judgment referred to above, thus, the addition under consideration is deleted, subject to factual verification by JAO.”
No Penalty If High Court Admits Quantum Issue As Substantial Question Of Law: Mumbai ITAT
Case Title : M/s. Small Industries Development Bank of India v. DCIT
Case Number : ITA Nos. 526 & 527/Mum./2026
CITATION : 2026 LLBiz ITAT(MUM)97
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) on 15 April held that “penalty” under Section 271(1)(c) of the Income Tax Act cannot be sustained where the quantum issue has already been admitted by the High Court as a substantial question of law. A Bench comprising Judicial Member Sandeep Singh Karhail and Accountant Member Bijayananda Pruseth quashed the penalty imposed on the Small Industries Development Bank of India, holding that admission of a substantial question of law by the High Court shows that the issue is debatable and supports the bona fide nature of the its claim.
Final Assessment Without Draft Order Under Section 144C Invalid: ITAT New Delhi
Case Title : Sumitomo Corporation India Pvt. Ltd. v. DCIT
Case Number : ITA No. 4400/Del/2025; IT(TP)A No. 14/Del/2025
CITATION : 2026 LLBiz ITAT(DEL) 98
The New Delhi Bench of the Income Tax Appellate Tribunal (ITAT) on 10 April, held that the Assessing Officer's failure to issue a draft assessment order under Section 144C(1) of the Income Tax Act renders the final order void. The Bench comprising Judicial Member C N Prasad and Accountant Member M Balaganesh allowed the appeals filed by Sumitomo Corporation India Pvt. Ltd. against the assessment orders passed by the Deputy Commissioner of Income Tax.
No Separate Tax Addition On Cash Already Owned By Group Company: ITAT New Delhi
Case Title : DCIT, Central Circle 26, Delhi v. Lalit Kumar Taluja
Case Number : ITA No.5456/DEL/2025
CITATION : 2026 LLBiz ITAT(DEL) 99
On 16 April, the New Delhi Bench of the Income Tax Appellate Tribunal (ITAT) held that once cash seized during search proceedings has already been owned and taxed in the hands of a group company before the Settlement Commission, authorities cannot again add the same amount in the hands of an individual, even if it was found in a locker held in his name. The Bench comprising Accountant Member S. Rifaur Rahman and Judicial Member Vimal Kumar dismissed the Revenue's appeal against Lalit Kumar Taluja for Assessment Year 2020–21, holding: “no doubt there was some cash found in the Locker No.75 maintained with HDFC Bank and the locker was owned by the assessee. The assessee, being the employee of the group company, the group company had owned up the above said cash kept in the abovesaid locker and the issue was settled before the IBS. Since the above cash owned up by the company, the same addition cannot be made in the hands of the assessee even though the assessee is not one of the applicants before the IBS. Therefore, we do not see any reason to disturb the findings of the ld. CIT (A).”