LiveLawBiz Direct Tax Weekly Round-Up: June 22 - June 28, 2026
Kapil Dhyani
29 Jun 2026 3:37 PM IST
SUPREME COURT
Case Title : The Deputy Commissioner of Income Tax vs Radhika Roy
Case Number : Diary No. 34735/2026
The Income Tax Department has challenged a Delhi High Court ruling that quashed reassessment proceedings against NDTV founders Dr. Prannoy Roy and Radhika Roy over interest-free loans received from RRPR Holdings Pvt. Ltd. The loans included about ₹21 crore advanced to Prannoy Roy and about ₹71 crore advanced to Radhika Roy. The Special Leave Petition is likely to be heard by a vacation bench of Justices R. Mahadevan and Alok Aradhe on June 30, 2026.
HIGH COURTS
Delhi HC
Case Title : Sunil Bhalla v. Deputy Commissioner Of Income Tax Circle 13 (1) New Delhi And Anr
Case Number : W.P.(C) 15337/2024
CITATION : 2026 LLBiz HC (DEL) 636
The Delhi High Court has reiterated that while computing the limitation period for reassessment proceedings under the Income Tax Act, the time granted to an assessee to respond to a notice issued under Section 148A(b) must be excluded in terms of the fifth and sixth provisos to Section 149. Applying this principle, the Division Bench of Justices Dinesh Mehta and Vinod Kumar dismissed a writ petition challenging reassessment proceedings as time-barred, holding that the order passed under Section 148A(d) and the consequential notice under Section 148 were issued well within the prescribed limitation period.
Case Title : Shailendra Nath Rai v. Assistant Commissioner Of Income Tax Circle 60 (1) New Delhi And Anr
Case Number : W.P.(C) 15305/2024
CITATION : 2026 LLBiz HC (DEL) 637
The Delhi High Court has held that a notice issued under Section 148A(b) of the Income Tax Act does not become invalid merely because the minimum seven-day period granted to an assessee for filing a reply extends beyond the limitation period prescribed for issuance of reassessment notices. A Division Bench of Justices Dinesh Mehta and Vinod Kumar observed that Parliament consciously provided for exclusion of the time granted to an assessee for filing a reply while computing limitation under Section 149, and that any contrary interpretation would defeat the legislative scheme.
Kerala HC
Case Title : Noel Villas and Apartments v. The Assistant Commissioner of Income Tax
Case Number : WP(C) NO. 4122 OF 2023
CITATION : 2026 LLBiz HC(KER) 112
The Kerala High Court has held that tax authorities conducting faceless assessments are not required to issue a draft assessment order before finalising proceedings in the case of ordinary assessees. Justice Ziyad Rahman A.A., while dismissing writ petitions filed by a partnership firm engaged in the real estate business, observed that the requirement applies only to "eligible assessees" specifically defined under the Income Tax Act. "The requirement of issuing a draft assessment order before finalizing the proceedings is necessitated only in the case of an 'eligible assessee' as defined under Section 144(C)(15)(b) of the Act," the court held.
ITAT
OYO Share Premium From FOCC Investment Not Taxable Under S.56(2)(viib) Income Tax Act: ITAT Delhi
Case Title : OYO Hotels and Homes Private Limited v. DCIT, Circle 19(1), New Delhi
Case Number : ITA No. 5718/Del/2025
CITATION : 2026 LLBiz ITAT(DEL) 189
The New Delhi Bench of the Income Tax Appellate Tribunal (ITAT) on 4 June held that Section 56(2)(viib) of the Income Tax Act cannot be invoked to tax share premium received through a Foreign Owned and Controlled Company (FOCC) where the investment complies with India's foreign investment regulations, as such transactions cannot be treated as routing unaccounted money. Accountant Member S. Rifaur Rahman and Judicial Member Vimal Kumar allowed the appeal filed by OYO Hotels and Homes Private Limited and deleted the addition made under Section 56(2)(viib) for Assessment Year 2021-22, while deciding cross appeals arising from the assessment.
Dividend From Cooperative Societies Remains Deductible Despite Erroneous Claim: ITAT New Delhi
Case Title : ACIT v. Zila Sahkari Bank Limited, Bulandshahr
Case Number : ITA No. 7658/Del/2025 with C.O. No. 71/Del/2026
CITATION : 2026 LLBiz ITAT(DEL) 190
On 19 June, the New Delhi Bench of the Income Tax Appellate Tribunal (ITAT) held that a bona fide claim made under an incorrect provision does not disentitle a taxpayer from claiming a deduction otherwise available in law, and that dividend income received from a co-operative society remains eligible for deduction even if it cites the wrong exemption provision. Vice President Mahavir Singh and Accountant Member Manish Agarwal dismissed the Revenue's appeal and allowed the cross-objection filed by Zila Sahkari Bank Limited, Bulandshahr, holding that the Assessing Officer wrongly made the addition on the society.
Case Title : Gemological Institute International, Inc. v. DCIT (International Taxation)
Case Number : ITA No. 1290/Mum/2025
CITATION : 2026 LLBiz ITAT(MUM) 191
On 19 June, the Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) held that a foreign company cannot be denied the benefit of a lower tax rate merely because no separate approval was obtained from the Central Government, where the transaction itself was permitted under the automatic route prescribed by the RBI. Judicial Member Beena Pillai and Accountant Member Arun Khodpia allowed the appeal filed by Gemological Institute International, Inc., noting that a taxpayer cannot be expected to obtain an approval which is not contemplated under the governing regulations.
ITAT Kolkata Remands Capital Gains Assessments Over Mandatory DVO Reference Under Section 50C(2)
Case Title : Tapan Das v. ITO, Ward-1(1), Siliguri
Case Number : ITA No. 2259/KOL/2024
CITATION : 2026 LLBiz ITAT(KOL) 192
On 18 June, the Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) remanded a capital gains assessment after holding that an Assessing Officer is duty bound to refer a property valuation dispute to the Departmental Valuation Officer (DVO) when a taxpayer seeks such reference under Section 50C(2) of the Income Tax Act, 1961. Judicial Member Yogesh Kumar U.S. and Accountant Member Rakesh Mishra was hearing an appeal filed by Tapan Das against an order upholding an addition of Rs. 63.52 lakh towards long-term capital gains arising from the sale of land.
ITAT Ahmedabad Holds Suspicion Cannot Replace Evidence, Strikes Down ₹38 Lakh & ₹10.5 Lakh Additions
Case Title : ACIT v. Shreenathji Extrusion
Case Number : IT(SS)A No.130/Ahd/2025
CITATION : 2026 LLBiz ITAT(AHM) 193
On 18 June, the Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) held that additions cannot be sustained merely on suspicion when a taxpayer furnishes complete documentary evidence. Vice President Dr. B.R.R. Kumar and Judicial Member Suchitra Kamble deleted additions of Rs. 38 lakh and Rs. 10.5 lakh made by the Income Tax Department against Shreenathji Extrusion. The Bench held: “There is no cash outflow of Rs. 10,50,000/- from the assessee to M/s. Balkrishana Metal, much less an unexplained investment within the meaning of Section 69 of the Act. The evidence that Rs.10,50,000/- inward receipt through RTGS which is in the custody of the Department itself proves that the assessee paid an amount of Rs.10,50,000/- to M/s. Balkrishna Metal”.
Revenue Cannot Sit In The Armchair Of Businessmen: ITAT Delhi Deletes ₹17.8 Lakh Addition
Case Title : Palco Tex Feb Limited v. Income Tax Officer
Case Number : ITA No. 3141/Del/2026
CITATION : 2026 LLBiz ITAT(DEL) 194
Tax authorities cannot sit in the armchair of businessmen and decide how businesses should be run merely because operations have ceased, the Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held. The tribunal deleted an addition of nearly ₹18 lakh that the Income Tax Department had treated as unexplained cash credits after a company received funds from its directors, their relatives, and a company under the same management. Accountant Member Ramit Kochar, sitting as a single-member tribunal, partly allowed the appeal filed by Palco Tex Feb Limited.
TPO Cannot Ignore Documentary Proof Of Services And Fix ALP At Nil: ITAT Ahmedabad
Case Title : Assistant Commissioner of Income Tax v. M/s. Schaeffler India Ltd.
Case Number : I.T.A. No.2215/Ahd/2025
CITATION : 2026 LLBiz ITAT(AHM) 195
The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT), on 6 June, held that once a taxpayer demonstrates actual receipt of management services through documentary evidence, the Transfer Pricing Officer (TPO) cannot disregard the transaction and fix the Arm's Length Price (ALP) at nil based merely on assumptions of commercial necessity. Vice President Dr. B.R.R. Kumar and Judicial Member Siddhartha Nautiyal dismissed the Revenue's appeal against Schaeffler India Ltd. and upheld deletion of transfer pricing adjustments aggregating to approximately Rs. 11.59 crore.
Case Title : Jitendra Motilal Chawla v. Income Tax Officer
Case Number : I.T.A. No.116/Ahd/2026
CITATION : 2026 LLBiz ITAT(AHM) 196
The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has held that in reassessment proceedings involving unexplained foreign remittances, additional evidence relating to a taxpayer's overseas residency status and foreign business activities must be examined where it goes to the root of the controversy. Vice President Dr. B.R.R. Kumar and Judicial Member Siddhartha Nautiyal set aside the assessment in Mr. Jitendra Motilal Chawla's case and restored the matter to the Dispute Resolution Panel (DRP) for reconsideration.
Mere Client Code Modification Not Enough To Invoke S.68 On Entire Transaction Value: ITAT Ahmedabad
Case Title : Deputy Commissioner of Income Tax v. Dharmdeep Commodities Pvt. Ltd.
Case Number : I.T.A. Nos.1966&1967/Ahd/2025
CITATION : 2026 LLBiz ITAT(AHM) 197
The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has held that the Department cannot treat the entire value of commodity transactions routed through alleged client code modifications as unexplained cash credits under Section 68 of the Income Tax Act, 1961, in the absence of material showing that the taxpayer benefited from accommodation entries. Vice President Dr. B.R.R. Kumar and Judicial Member Siddhartha Nautiyal upheld relief granted to Dharmdeep Commodities Pvt. Ltd. and ruled that the authorities can tax only the profit element embedded in such transactions, not the entire transaction value.
Case Title : Assistant Commissioner of Income Tax v. Biharibhai Gokalbhai Patel
Case Number : I.T.A. No.235/Ahd/2026
CITATION : 2026 LLBiz ITAT(AHM) 198
The Income Tax Appellate Tribunal (ITAT) in Ahmedabad has upheld the deletion of additions made against a taxpayer after finding that documentary evidence showed the disputed property investments were made in an earlier financial year and not during the assessment year under consideration. A bench of Vice President Dr. B.R.R. Kumar and Judicial Member Siddhartha Nautiyal dismissed the Income Tax Department's appeal against the relief granted by the Commissioner of Income Tax (Appeals).
ITAT Ahmedabad Holds Form 26AS Mismatch Alone Insufficient For Addition, Restores ₹42.34 Lakh Issue
Case Title : Checkmate Services Pvt. Ltd. v. Deputy Commissioner of Income Tax
Case Number : ITA No. 1696/Ahd/2025
CITATION : 2026 LLBiz ITAT(AHM) 199
The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) on 17 June held that a mismatch between revenue reflected in Form 26AS and a taxpayer's books of account does not, by itself, justify an addition, and that such discrepancies require a proper reconciliation exercise before any addition can be sustained. Vice-President Dr. B.R.R. Kumar and Judicial Member Rahul Chaudhary allowed the appeal filed by Checkmate Services Pvt Ltd for statistical purposes and remanded the Rs. 42.34 lakh addition to the Assessing Officer for fresh consideration after reconciliation.
Case Title : LANXESS India Pvt. Ltd. v. ACIT, Circle-1, Thane
Case Number : ITA No.6627/Mum/2025
CITATION : 2026 LLBiz ITAT(MUM) 200
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has deleted a transfer pricing adjustment of ₹61.22 crore. The tribunal held that a pending appeal before the Bombay High Court does not dilute the binding nature of an earlier coordinate bench decision unless it has been stayed or reversed by a superior judicial forum. A bench of Judicial Member Anikesh Banerjee and Accountant Member Om Prakash Kant and passed the order while allowing an appeal filed by LANXESS India Pvt. Ltd.
ITAT Ahmedabad Condones 388-Day Delay In Appeal, Cites Poor Advice From Tax Consultant
Case Title : Shree Nathubhai Sa Vjibhai Desai College of Education v. Income Tax Officer, Ward-1
Case Number : ITA Nos. 523 & 798/AHD/2026
CITATION : 2026 LLBiz ITAT(AHM) 201
The Income Tax Appellate Tribunal (ITAT) at Ahmedabad has recently condoned a 388-day delay in filing an appeal by an educational institution. The tribunal found that the delay was caused by inadequate legal advice from its previous tax consultant and a bona fide belief that no further compliance was required. A bench of Vice President Dr. B.R.R. Kumar and Judicial Member Rahul Chaudhary set aside orders of the Commissioner of Income Tax (Appeals) passed through the National Faceless Appeal Centre (NFAC).
ITAT Ahmedabad Upholds Relief To Adani Total Gas, Says No Exempt Income No Section 14A Disallowance
Case Title : Deputy Commissioner of Income Tax v. Adani Total Gas Limited
Case Number : ITA No. 785/Ahd/2026
CITATION : 2026 LLBiz ITAT(AHM) 202
The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) on 22 June reiterated that no disallowance can be made under Section 14A of the Income Tax Act where the taxpayer has not earned any exempt income during the relevant assessment year. Vice President Dr. B.R.R. Kumar and Judicial Member Rahul Chaudhary dismissed the Revenue's appeal and upheld the deletion of a Rs. 2.38 crore disallowance made against Adani Total Gas Ltd. for Assessment Year 2020-21.
ITAT Restores Appeal As Assessee Receives Order Intimation Belatedly, Accepts Envelope As Proof
Case Title : Sudipta Traders Pvt. Ltd. v. ITO, Ward-10(2), Kolkata
Case Number : ITA No. 465/KOL/2026
CITATION : 2026 LLBiz ITAT(KOL) 203
The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) on 22 June held that an appeal cannot be dismissed as time barred if filed within the statutory period computed from the date of service of the order. Courts & Judiciary Judicial Member George Mathan and Accountant Member Rakesh Mishra set aside an Order of the Commissioner (Appeals) that had dismissed an appeal by Sudipta Traders Pvt. Ltd. without examining merits, and restored the matter for fresh adjudication.
Loan To Non-Shareholder Company Not Taxable As Deemed Dividend Under Section 2(22)(e): ITAT Kolkata
Case Title : JHV Steels Ltd. v. DCIT, CC-2(2), Kolkata
Case Number : ITA No. 1274/KOL/2024
CITATION : 2026 LLBiz ITAT(KOL) 204
On 22 June, the Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) held that a loan received by a company cannot be taxed as deemed dividend under Section 2(22)(e) of the Income Tax Act merely because it has a common shareholder with the lending company, where the borrowing company itself is not a shareholder. Judicial Member George Mathan and Accountant Member Rakesh Mishra partly allowed JHV Steels Ltd.'s appeal against an order passed under Section 263 of the Income Tax Act and set aside the Principal Commissioner's revision on the deemed dividend issue.
ITAT Kolkata Restores Appeal Over CPC Notice Sent To Former Consultant, Condones 1,542-Day Delay
Case Title : Angkur Moulik v. ITO, Ward-1(1), Siliguri
Case Number : ITA No. 3124/KOL/2025
CITATION : 2026 LLBiz ITAT(KOL) 205
The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) on 22 June held that authorities must condone delay where sufficient cause exists, particularly when tax communications are addressed to a former authorised representative and the taxpayer establishes lack of actual knowledge. Judicial Member George Mathan and Accountant Member Rakesh Mishra allowed the appeal filed by Angkur Moulik, set aside the order of the Commissioner of Income Tax (Appeals) [CIT(A)], and restored the matter for adjudication on merits after condoning a delay of 1,542 days.
Case Title : The Bank of Nova Scotia v. Assistant Commissioner of Income Tax & Connected Matters
Case Number : ITA Nos. 3159/Mum/2004, 7158/Mum/2004, 2285/Mum/2005 and connected appeals & cross-objections
CITATION : 2026 LLBiz ITAT(MUM) 206
The Income Tax Appellate Tribunal (ITAT), Mumbai, has recently held that interest income earned by a foreign bank from foreign currency loans extended to Indian corporates is taxable on a gross basis. It ruled that such income cannot be reduced by attributing expenditure before the concessional rate of tax is applied. The bench of President Justice C.V. Bhadang and Accountant Member Vikram Singh Yadav held that the provisions of Section 115A of the Income Tax Act require interest income earned by a foreign company from foreign currency loans to be taxed on a gross basis, without allowing any deduction for related expenditure.
ITAT Delhi Says Computation Of Mandatory Interest Must Be Examined Before Dismissing Appeal
Case Title : Diamond Piston and Rings Ltd. v. ACIT
Case Number : ITA No. 1421/Del/2026 (AY 2012-13)
CITATION : 2026 LLBiz ITAT(DEL) 207
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that while the levy of interest under the Income Tax Act is statutory and mandatory, an appeal challenging its computation cannot be dismissed without examining the issue on merits. A coram of Judicial Member Vimal Kumar and Accountant Member Ramit Kochar ruled, “There is no dispute that the interest is statutory and mandatory, but working /computation could be subject to challenge, if the assessee is so aggrieved, which then need to be worked out as per mandate of the 1961 Act. It is observed that Ld. CIT(A) has dismissed the appeal without checking the computation of working of interest u/s 234A and 234B.”
ITAT Delhi Deletes ₹1.23 Crore Addition To Borrower's Income Over Lender's Low-Declared Income
Case Title : Florence Nightingale Educational Society v. DCIT
Case Number : ITA No. 5586/Del/2025 (AY 2017-18)
CITATION : 2026 LLBiz ITAT(DEL) 208
The Income Tax Appellate Tribunal (ITAT) at Delhi has recently reiterated that a lender's low declared income, by itself, is not sufficient to reject its creditworthiness for advancing an unsecured loan. Allowing the appeal of Florence Nightingale Educational Society, the tribunal observed that the relevant test is the lender's ability to arrange funds and not merely its earning capacity. Judicial Member Raj Kumar Chauhan and Accountant Member S. Rifaur Rahman allowed the appeal filed by Florence Nightingale Educational Society.
ITAT Ahmedabad Quashes Reassessment Against Tipsons Stock Brokers, Deletes ₹1.33 Crore Disallowance
Case Title : Tipsons Stock Brokers Pvt. Ltd. v. Dy. Commissioner of Income-tax
Case Number : ITA No. 1416/Ahd/2026
CITATION : 2026 LLBiz ITAT(AHM) 209
The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has recently quashed reassessment proceedings against Tipsons Stock Brokers Pvt. Ltd. It held that the Income Tax Department reopened the assessment solely by re-examining material already on record. The tribunal also deleted a disallowance of about ₹1.33 crore made against the company. A bench of Vice President Dr. B.R.R. Kumar and Judicial Member Rahul Chaudhary observed that the conditions for reopening an assessment beyond four years were not met. It found no failure by the company to fully and truly disclose material facts.